We Are All Partners, and We Have the Rights of Partners

What is the Traditional Social Responsibility of a Business Firm?

The COVID-19 pandemic has highlighted many questions of social justice. Some of them – like the question of who should receive federal aid while our economy is shut down - demand answers right away. Such questions will receive practical answers in the form of legislation. However, behind these immediate questions lie bigger questions about the responsibilities of business firms in a society where business firms cannot survive without periodic injections of public cash. How should business firms in a such a society behave? Should we demand that they behave in ways that promote social justice? In the light of the COVID-19 pandemic and of our government’s response to it, we must rethink all of our ideas about business firms and their relationship to us and to the rest our society as a whole.

The traditional view of business firms comes from the work of Adam Smith. In this view, they are private organizations that offer goods or services that people want to buy, and our relationship to them consists solely of transactions in which we buy the things that they sell to us. The firms are assumed to act purely in their own self-interest, but market competition ensures that their self-interested activity will redound to the benefit of all of us.[1]  They want to maximize their profit, but to do that, they have to attract us to buy from them. If their prices are too high or their products are of poor quality, we will not buy from them, and they will lose money. Thus, the “invisible hand” of the free market ensures that the firm that offers the best products at the market price will get our business.  Its competitors must either come up to the standard of the competition or fail. Each individual firm is small in relation to the size of the market as a whole, and so, can allow firms to fail because others will arise to take their places. The failure of an individual firm will not damage the economy as a whole, and social justice need not be a concern of a business firm, which acts in its own interest. As Milton Friedman, put it,

There is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

The Traditional View of Firms is No Longer Sufficient

The traditional view of firms has never been an adequate description of the large firms that dominate their markets in a modern economy, and today, that view has become absurdly inadequate. Today, some firms have become so big and important that we cannot allow them to fail. The consequences for their employees, for the communities where the firms operate and for our society as a whole would be too severe. Consequently, we can no longer allow the invisible hand of the free market to do its job of disciplining business firms, and in fact, we do not allow it to do so. In 2008, we extended billions of dollars of assistance to large firms to prevent our economy from collapsing, and now, in the face of the COVID-19 pandemic, we are about to do it again.

Moreover, the current crisis has shown us that we must also see small businesses as too big collectively to fail. Just as the failure of a large firm could bring down our economy, so, could the simultaneous failures of thousands of small businesses. We now live in a world where big events – like the current pandemic – can cause many small businesses to fail at once. Today in the United States, millions of small restaurants and other “main street” businesses may fail in the current crisis, and the effect on our economy would be disastrous. We can see what would happen in this story of one restaurant in New York. So, our most recent aid bill includes loan guarantees for small businesses as well as large ones.

We Are Now Partners in Every Firm

The need to provide public assistance to prevent many businesses from failing in the current crisis has in effect made all of us into partners in all of the firms in our country, and as such, we take responsibility for their survival. We did so in 2008, and we are doing it now. In fact, whenever companies in an important sector of our economy are in danger of failing, they come to us for an injection of cash to keep them afloat, and we oblige because we must.  In Adam Smith’s view of the firm, this could never happen because in that view, we would not care if a particular firm failed. Other firms would arise to take its place, and there would be no danger to the rest of us or to the economy as a whole. Therefore, we could allow the free market to impose its discipline.

In the current crisis, no one thinks that we should allow the failure of millions of businesses. We argue over how much help to give to them; we argue over which companies to help; we argue over the conditions under which aid should be given; and we disagree about whether it is better to provide money directly to companies or whether it is better to give money to workers, who will then spend it; but no one says that we should do nothing. No one believes that we should simply allow our hotel chains, our airlines or our small, local restaurants to go under. Too many people would lose their jobs; too many small suppliers to those companies would also fail. No one believes that the free market should be allowed to impose its discipline.

Twice in a single generation, we have seen some of our largest companies turn to us for injections of cash to prevent them from failing, and today, we see small companies doing the same. Moreover, we can be sure that events like the crash of 2008 or the COVID-19 pandemic will recur. We will get through the current crisis, but we can be confident that in a few years, some other major event will shake the economy, and our firms will again come to us hat in hand.

If firms depend on periodic, public assistance, we who provide that assistance – the people of the United States – are entitled to have a say in the ways that the firms are run. If we must act as partners, we have the right to tell the companies that we will help them only if they operate in ways that benefit us, and we are entitled to enact regulations to ensure that they do so. Such regulations must be considered a standard and unavoidable part of the economic system we live in because, in that system, firms cannot survive without public assistance.

What Should We Demand of Our Business Firms?

So, we must think seriously about how firms should operate. What does our commitment to social justice demand? What should we require of firms in our society? How should they behave? Here are a few of the things we should think about.  This is not a complete list, but it is a start.

1. We should think about climate change and our environment. Perhaps, we should not allow firms to operate in ways that put our planet at risk. Perhaps, firms should act positively to maintain and restore our environment.
2. We should think about the distribution of income. Perhaps, our firms should be required to operate in a way that provides an equitable distribution of income among our people.
3. We should think about our national interest. Perhaps, we should not allow our firms to operate in a way that is contrary to our national interest.
4. We should think about the distribution of the burden of taxation. How should the cost of government be apportioned among various sectors of our population?
5. We should think about racial justice. Perhaps, a country that has prospered by exploiting people of color should now require its companies to promote racial equity.
6. We should think about human rights. What things are human rights? What goods and services should be provided to all of our people, and what goods and services should be apportioned by the free market? For example, is health care a human right? Is housing?

We should begin a national conversation on these topics, and the conversation should be based on the idea presented here: firms cannot survive without public assistance, and therefore, we who provide the assistance are entitled to a say in the running of the firms. We must think about the requirements we want to place on them. What do social justice and our shared, common interest require?

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[1] Heilbroner, Robert, The Worldly Philosophers, New York, Simon and Schuster, 1961, p. 40

Affordable Childcare Should be a Key Issue in this Election

Millions of Women Cannot Afford Child Care

Millions of women in the United States cannot afford the child care that would make it possible for them to go to work, lift themselves out of poverty and contribute to the growth of our economy. The victims of the child care crisis are mainly working-class women, but we all suffer because of its effect on economic growth. The free market cannot resolve the child care crisis because on the one hand, child care is a business with very low margins of profit, and on the other hand, the providers cannot raise their prices because the people who need the service cannot afford to pay more.[1]  A federal program to provide affordable child care would help millions of women and promote the growth of our economy.

Millions of Women and Their Children Are Stuck in Poverty While Businesses Need Workers

Because of the lack of affordable child care, millions of women and their children are stuck in poverty. This problem is especially serious for women of color,  many of whom find themselves in child care “deserts” where licensed care is unavailable at any price. However, the problem also affects millions of white, working-class women.  Surveys have shown that many women would find jobs or work more hours if the cost of child care did not eat up all or most of their earnings.

Poverty is well-known to cause various social pathologies. Children from poor families often do poorly in school; they often drop out and thus continue their poverty into the next generation. The ill effects of poverty affect people of all races and are especially widespread among families headed by women. Poverty is also expensive for those of us who are not poor. We spend billions every year on programs like Food Stamps and Medicaid that are designed to alleviate the suffering of poor people. We would spend less on such programs if we provided the child care that allowed millions of families to lift themselves out of poverty

The lack of child care also limits the growth of our economy because it limits the amount of labor that is available to businesses. A business can grow only if it can find people to do the necessary work, and we know that millions of women would like to work if working earned them more than the cost of child care. If child care were available at an affordable price, millions of families would be able to pull themselves up out of poverty. They would become more self-reliant; our economy would grow faster; and we would save money that is now spent alleviating the poverty that is caused by the lack of child care.

Child Care as a Kind of Infrastructure

The easiest way to think about this issue is to think of child care as a kind of infrastructure.  We build roads and airports, and we support public schools and universities as infrastructure investments. We know that the free market would not provide such facilities even though they make a big contribution to our economy.  All of our businesses depend on our transportation infrastructure, and they depend on the availability of an educated work force. Thus, our infrastructure investment benefits all of us. Child care is like that. It would benefit the women who make use of it, and it would also benefit the rest of us through its effect on economic growth.

An Opportunity for the Democratic Party

The need for affordable child care provides an opportunity for the Democratic Party. Working class women are a natural constituency for the party, but it has rarely spoken directly to their needs.  If we can persuade them that we are prepared to offer a real solution to one of their most pressing problems, we will surely garner millions of votes.  Let’s take advantage of this opportunity! Let’s make affordable child care a key issue in this year’s Democratic campaign!

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[1] The cost of child care in the U.S. today is nearly $10,000 per year.

Elections are About the Future

The Fight Will Not End in November

Democrats must remember that winning the election in November is not the end of the fight for a better society and a planet we can live on. On Super Tuesday, we came out in favor of Joe Biden over Bernie Sanders because most of us believed that he was the who had the best chance of ridding our country of the monster who now occupies the Oval Office.  Maybe, we are right. However, in the fight to defeat our current president, we should not forget the reason why he has to go.


He has to go not just because he is repugnant to us but because he prevents us from solving the most important problems of our time. Moreover, he is not doing that alone. The whole Republican Party is preventing us from moving forward. We will be unable to do what needs to be done as long as the Republicans control our federal government.

We Have a Moral Responsibility to Act

The Republicans are a barrier to progress because they deny our moral responsibility to work together to solve our shared problems. They believe that collective action is always bad because it infringes on the rights of individuals, but we Americans are not merely a scatter of individuals. We are a community, and we know that we must work together to solve our shared problems. No scatter of individuals each working alone will save our planet for our children and grandchildren or provide healthcare for everyone.


We must work together to deal with our many social, economic and environmental problems because we have a moral responsibility to provide a safe, sustainable an equitable world for ourselves and for our children.  Our government is the means by which we act as a community, but today, our government is controlled by people who deny we really have a moral responsibility to act as a community. We cannot move forward until we take back our government.


This election gives us an opportunity to take back our government, but that will be valuable only if it enables us to solve the problems that we face, and from that point of view, Joe Biden is far from an ideal candidate. If he is elected, he may too easily abandon progressive ideas in order to obtain bipartisan support for whatever proposals he puts forward. He is good at “getting things done,” but passing a bill that accomplishes too little is not a victory.

We Need to Organize Around Issues

We must ask ourselves what we should demand of him in November and beyond? What must he promise to work for? For example, what should we demand of him on health care reform? He will not support Medicare for All, but maybe, we can get Healthcare for All. Some version of an expansion of the Affordable Care Act could accomplish that, and perhaps that is what we should insist on.  We cannot look for ideological purity, but perhaps, we can make life better for all Americans. We must ask ourselves similar questions about the other issues we face? Do we demand free post-secondary education, or would we be satisfied if it were cheap enough to be affordable? How much of the Green New Deal do we really require? Of course, we start by demanding the whole enchilada, but we know that we probably won’t get it. So, what can we accept? Also, what are our priorities? If we could get Healthcare for All but not the Green New Deal, what would we do?


One of the keys to success in any negotiation is knowing in advance what would make a deal a good one for us. What is our minimum requirement for a deal? When would we walk away from a deal?

We need to think clearly, and to do that, we need to organize around issues. In every local, Democratic Party, there should be groups working out positions on issues, and we should communicate our positions to our state and national parties. Our positions can be the basis for keeping the pressure on our new president and his allies in Congress to fight for a better society and a livable planet.

The Election is About the Future

We can make progress toward becoming the society that we should be. The election in November is about moving forward. It is about us and our community. We must work hard to replace our current president because we have a vision of a better future. We should work for that vision.


That means that we must keep the pressure on our party and our candidates to work for real solutions to the problems that we face. That will not be easy.  If Biden wins in November, he will be hampered by his tendency to compromise his principles for political expediency. However, we can help him to avoid doing that by keeping the pressure on him for change.  Polls have shown consistently that most Americans support reasonable solutions to our problems. So, we can steer our leaders in the right direction if we keep the pressure on them.


Organize around issues! Keep the faith!

The Revolution That Wasn't

The Revolution Was All About Turnout

I recently published a post in this space that said that the revolutionary part of American progressive politics was the change it proposed in the balance of power. The progressives proposed to take power away from the “establishment” by stimulating a very large increase in voter turnout among young people. They would vote in candidates who would enact a progressive agenda.


The progressive agenda, itself, was not revolutionary. It amounted to an extension of policies that had been in place for decades or a return to policies that we used to have. Medicare For All, for example, would be an extension of the existing Medicare program; free post-secondary education would be a return to the conditions of the 1950s; and the Green New Deal would extend our support for energy production from fossil fuels to green energy. This very unrevolutionary agenda was being blocked by our country’s radical right, which denied the value of government programs in solving society’s problems, but we could break though the blockage by electing progressive politicians. We could do that if we stimulated a big increase in voting by young progressives.

The Turnout Didn't Occur

On Super Tuesday, no such increase occurred. What did occur was a big increase in turnout among  moderate Democrats, Black voters and Republican “never Trumpers” who supported Mr. Biden in large numbers. I think that Super Tuesday’s results settled the argument that had been going on in the Democratic Party since 2018. Some of us had espoused the view that we could win in 2020 by stimulating a big turnout among people who had not voted before. This was the argument of Alexandria Ocasio-Cortez, who claimed to have won her seat in that way, and this was the argument of Mr. Sanders’s presidential campaign. Others in our party – like Amy Klobuchar and Pete Buttigieg – had said that to win, we would have to appeal to moderate voters in places like Wisconsin, Pennsylvania or Virginia.

We Must Depend on People Who Go to the Polls

Super Tuesday settled that argument. The young voters who were supposed to power the revolution did not show up at the polls in sufficient numbers to win the election. Mr. Sanders’s failure in 10 states was not due to some sort of establishment conspiracy, and it was not due to the evil effect of big money. Mr. Sanders’s campaign had raised plenty of money, and Mr. Bloomberg, who had spent almost half a billion dollars, flopped. Mr. Biden’s victory was due to the fact that his supporters went to the polls while Mr. Sanders’s supporters did not. If we want to win in November, we have to appeal to people who go to the polls.

Keep the Faith!

This is not really a tragedy for the progressive agenda because it has never been really revolutionary. It has always consisted of incremental reforms to the status quo. So, we don’t have to despair. We can get some health care reform and parts of a green new deal with candidates who can win in November. We won’t get everything that we want, but we may get a lot. To do that, we will have to keep the pressure on our politicians. Their weakness is that they are too quick to compromise. So, we have to make sure that the option of compromising by delivering nothing is not available. So, work to win in November!

Keep the faith! Keep your eye on the prize!

Elect Jill Karovsky To Preserve Programs to Deal With Poverty and Inequity

A Danger to Our Programs to Deal With Poverty and Inequity

Elect Jill Karofsky to the Supreme Court to preserve our Wisconsin’s ability to deal with public issues of poverty and inequality. Her opponent Daniel Kelly will destroy our ability to deal with such problems because he believes that government has no useful role to play in this area. His views are clear, and they are based on his religious extremism.

Kelly Believes that State Programs are Inconsistent With God's Will

Kelly’s religious views have led him, to see all publicly funded welfare and assistance programs as illegitimate and inconsistent with God’s law. As Kelly sees it, God demands that we be compassionate, but, he says, compassion can never be forced, and any publicly funded program is based on force. In his view, a publicly funded welfare program takes money by force from hardworking citizens and determines by force who the recipients of the money should be. This is wrong because, “Compassion cannot coexist with compulsion; it is a love response, and love cannot be compelled.”

He believes that this approach is not only inconsistent with God’s law. It can never be effective because it is based on the idea that poverty is a group problem. Kelly, in contrast, starts from the proposition that, “Poverty is not a group problem, it is an individual problem.” That is, the causes of poverty are entirely individual. Social structure, economic processes and national history play no role. If a person is poor, it is his/her individual failing or misfortune. Things like racism, sexism or the quality of our educational system play no role, and government programs like food stamps, Medicaid, Medicare or Head Start can play no useful role in alleviating poverty. Kelly says,

Compassion cannot coexist with compulsion; it is a love response, and love cannot be compelled.  The Good Book has something to say about this: “Love is patient, love is kind. It does not envy, it does not boast, it is not proud.  It does not dishonor others, it is not self-seeking, it is not easily angered, it keeps no record of wrongs.  Love does not delight in evil but rejoices with the truth.  It always protects, always trusts, always hopes, always perseveres.”  I Cor. 13:4-7.  Is there anything there compatible with compelled wealth transfers?  I didn’t think so either. [My italics]

If God is love, and compassion a loving response, maybe God belongs at the apex of the triangle instead of the state – if we’re looking to be compassionate, of course.  Sitting right behind the commandment to love God with all your heart there is this: “Love your neighbor as yourself.”  Mark 12:31. What if we did?

Only Christian Charity has a Place

In place of government action, Kelly would rely on the Christian charity of individuals. He says,

It is the church’s glory to care for the poor and the widow and the helpless.  It’s not a burden.  It’s not a chore.  And it’s not something that can be satisfied by posting the 3-figure balance of the “deacon’s fund” on the back page of the church bulletin.

Jesus didn’t leave the church many mandates.  It’s not like the New Testament is an ancient version of the Code of Federal Regulations, stuffed from cover to back with endless and mind-numbing directives on what he expects of us.

It’s so simple.  Love God.  Love your neighbors.  How simple is that?  Simple enough that when a lawyer thought to excuse himself from its simplicity by quibbling over the second command, Jesus slapped him down (lovingly, to be sure) with the Good Samaritan.

The unrealism and heartlessness of this are breathtaking. Will the millions of single mothers who struggle to feed their children on minimum wage jobs be fed by individual charity if we take away their Food Stamps? Will our individual kindness support millions of American old people if we take away their Medicare?  Will our doctors care for millions of poor people out of charity if we take away their Medicaid? Of course not, but Kelly believes that Food Stamps, Medicare and Medicaid are contrary to God’s will and that the laws that established those programs are inherently illegitimate. 

Elect Jill Karofsky

We cannot allow a man who holds such cruel unrealistic views to determine what our laws should be. How can we allow such a man to rule on questions involving public welfare, healthcare, education, minimum wages or the position of women?

We must choose Jill Karofsky for Wisconsin’s Supreme Court in April.