In the face of growing wealth inequality worldwide, more and more people are discussing alternatives to the current laissez-faire capitalism status quo. Tamara Belinfanti, Sergio Gramitto and the late Lynn Stout offer up their own solution in Citizen Capitalism: How a Universal Fund Can Provide Influence and Income to All.
The authors have devised a concept they call the Universal Fund. It’s like a sovereign wealth fund but is privately created and funded via private ordering. That means that the Universal Fund is to be created from donations of stocks by companies and philanthropists. The government would hence be uninvolved; the Universal Fund is not a socialist venture. Rather, it is in part modeled on the structure of NGOs like the Sierra Club and the Red Cross. The Fund would provide an annual dividend to every citizen, with no maximum income cap. Though it may seem absurd to send welfare payments to the wealthy, it’s politically savvy framing. A free public college bill was passed in ultraconservative Tennessee thanks to having no maximum income cap; conservative detractors weren’t able to use the “class warfare” and “welfare queen” arguments. It should be noted that charitable tax deductions, estate tax reductions, and lowered tax brackets would act as a de facto government incentive for the wealthy to donate to the Universal Fund.
The goals of the Universal Fund would be to decrease wealth inequality, encourage long-term investment and increase civic engagement in corporate culture. On the last point, the authors remind us that, “The top 10% [of wealthiest Americans] hold more than 90% of all shares.” Even in regards to the other 10% of shares owned, most of them are passively owned. Most small-time investors don’t have time to vote at the annual general meetings of every company in which they are invested. Thus, boardroom votes are dominated by two shareholder proxy advisory firms and individual investors who own a substantial percentage of shares, as well as fund portfolio & hedge fund managers.
These Wall Street elites naturally tend to vote based upon their elitist interests. Thus, they usually make decisions that are insane in terms of employee welfare, long-term corporate growth, executive pay, and the environment. For example, `the authors remind us of the recent case of Martin Shkreli, the hedge fund manager who acquired Turing Pharmaceuticals and then raised AIDS medication prices from $13.50 to $750. This is the embodiment of the Reagan-era Golden Rule of maximizing shareholder value. Not only is this Gordon Gecko truism objectively crazy, but it’s also actually legally unfounded. Contrary to what you hear on CNBC or Fox Business, there’s no legal requirement that companies only focus on maximizing shareholder value. The book relates the following quote from Supreme Court Justice Samuel Alito’s comments in the recent case Burwell v. Hobby Lobby: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so.”
Citizen Capitalism points to the ongoing successes of the sovereign wealth funds of Norway and Alaska, ultraliberal and ultraconservative societies, respectively. The Alaskan fund generally provides each citizen with a dividend payment of a few thousand dollars each year, via the state’s oil revenues. The Government Pension Fund Norway is a more pertinent example since it’s funded through a $1 trillion stock portfolio. Norway is not only able to fund its citizens’ pensions through the Fund, but also exert moral influence on the market. The Fund boycotts various egregious companies, like cigarette manufacturers, and will sell its shares in a company that gets exposed for abusive practices, like employing child labor. Our authors likewise want the Universal Fund to use a carrot-and-stick approach in regards to corporate ethics.
The thesis of Citizen Capitalism is, as the title suggests, rooted in optimism for capitalism. Though they write about the success of the socialist program in Alaska specifically, a conservative state in the US, the authors are convinced that a sovereign wealth fund bill could never be passed in Congress. Recent polls and election results, however, show that Americans are starting to overwhelmingly favor ambitious government-program proposals like Medicare for All and a Green New Deal. As I wrote before, the Universal Fund would mostly be feasible due to tax incentives; these government incentives would likely need to be greatly expanded in order to encourage enough stock donations to build the Fund to a substantial size. Even America’s greatest philanthropists still stockpile billions of dollars in their offshore bank accounts. Thus, one shouldn’t expect the Universal Fund or other private UBI schemes to become a replacement for state management of wealth inequality through programs like public school funding and marginal taxation. Nonetheless, Citizen Capitalism is a stimulating little primer for rethinking the relationship between Wall Street and Main Street managing the looming crises of a rapidly aging workforce and automation, plus the balancing of private and public sectors in regards to solving societal problems.
India’s VIP culture: Forget Lincoln’s definition of democracy. India’s government is of VIPs, by VIPs and for VIPs
Last week, the Madras high court ordered the National Highways Authority of India to separate ordinary citizens from VIPs at toll gates, with a dedicated lane for the latter. Of course, high court judges are included in the list of VIPs. The court held it to be ‘disheartening’ and ‘very unfortunate’ that judges are ‘compelled to wait in the toll plaza for 10 to 15 minutes’.
NHAI decided to challenge the directive. One might have expected the judges to be rather more concerned that more than a million cases have been pending in 24 high courts across India for over a decade. According to CJI Dipak Misra, the total backlog of cases at all levels of the judiciary is a staggering 33 million! The impact of this delay should weigh a bit more heavily in the minds of the learned judges while they leave matters of administration in the hands of the executive branch of government.
What is telling about the directive is the VIP mentality that has become part of the DNA of India’s ruling elite. Contrary to Abraham Lincoln’s famous definition of democracy, India has a government of VIPs, by VIPs and for VIPs. They do what they can, the people suffer what they must. In the heyday of European empires, colonial masters ruled imperiously over conquered subjects. During the Raj, the British class system fused seamlessly with India’s caste system to entrench social divisions even more rigidly.
After independence, India proudly declared itself a sovereign democratic republic and added the word ‘socialist’ in the Constitution. The central tenet of the four words taken together – sovereign, democratic, socialist, republic – is the sovereignty of the people. Politicians and officials are their servants. But as in other self-described socialist and communist paradises, India’s ruling elites captured all the privileges while the disempowered populace was saddled with poverty, scarcity and general misery.
The elite moved into the newly-vacated opulent bungalows of Lutyens’ New Delhi, even as the growing mass of destitute citizens lived in slums that sprang up along the city’s outskirts. Gradually political office became the fastest route to miraculous wealth acquisition and conspicuous consumption. In time the brazenness of privileged behaviour spread to an all-encompassing sense of entitlement as the political and bureaucratic elite, in that order, began to act like feudal overlords over citizens.
The more that the quality of public services (health, education, infrastructure) decayed and institutions were degraded and corrupted, the greater was the distance between the lifestyle of the closed circle of the elite and ordinary citizens. Inevitably this morphed into the VIP culture that Indians by and large detest with a depth of contempt, anger and resentment that is difficult for foreigners to fathom.
The Congress party bears particular responsibility for this sorry state of affairs as the party of government in New Delhi and most states after independence. One of the great attractions of Prime Minister Narendra Modi’s election winning slogan of good governance in 2014 was it promised to restore the rightful balance in relations between citizens, officials and politicians. ‘Twas not to be. In this as in most other respects, the gap between boastful rhetoric and actual practice remains distressingly wide: the 56-inch chest has been overshadowed by a 96-inch tongue.
Modi has tried to lead by example in some respects and is not in the least bit ostentatious himself. Nor has he given any indication so far of abusing his office for private gain or mistreating citizens. But this was the defence that his predecessor Manmohan Singh adopted without success: that the sea of corruption in which so many of his ministers were drowning was no indictment of his performance, for he himself was squeaky clean.
Similarly, although Modi himself has not been seduced by the VIP culture, he has failed to assert himself against those from within his and allied parties who have very publicly abused their offices. Perhaps he did learn the trick of bathing with a raincoat from Dr Saheb after all.
An obvious display of VIP culture that strikes foreign visitors is the list, in full public display at airports, of more than 30 categories of VIPs exempt from pre-boarding security screening. And how else other than a deeply instilled VIP culture do we explain Shiv Sena’s MP Ravindra Gaikwad’s air rage last year when he boasted he’d used his slippers to hit a 60-year old Air India staffer 25 times?
In a civilised country Gaikwad would have been expelled from the party, charged with assault and lost his seat. The party would have moved quickly to apologise to the attendant and the people and promised that such appallingly thuggish behaviour is neither condoned by nor acceptable to the party. But not in India’s corrupted political culture. Instead, Shiv Sena threatened to disrupt air travel. The Centre capitulated to this mobster-like blackmail and ordered Air India to take Gaikwad off the no-fly-list. Throughout the highly publicised episode, Modi’s silence was as eloquent as his predecessor’s on maha-scandals.
Compare this to a notorious incident in Pakistan – supposedly a less robust democracy – where on 15 September 2014, former interior minister Rehman Malik held up a plane for two hours. When he finally boarded, angry passengers harangued him and refused to let the plane take off until he had been thrown off. A passenger uploaded a video of the incident to YouTube. Two weeks later he was sacked from his unrelated job but not before his video was widely shared and praised by a public sick to death of Pakistan’s VIP culture.
Priyanka Gandhi’s entry into UP politics has sent political opponents into tizzy
Conventional political wisdom, in the absence of credible caste Census data, classifies 52 per cent of the state’s population as ‘Backward Classes’, 18 per cent as Dalits, 5 per cent each of Brahmins and Thakurs and Muslims as 17 per cent of the people. Smaller castes and sub castes are said to constitute the remaining three per cent.
The caste cauldron of eastern Uttar Pradesh has witnessed Kurmis float the ‘Apna Dal’ and the Rajbhars forming the Bharat Samaj Party. Boatmen and fishermen in eastern UP also are clamouring for better representation in politics. They will want their pound of flesh and bargain hard for seats. The small parties have small pockets of influence but are said to be important. Some say they are more important in 2019 than they were in 2014. Can they win half a dozen seats on their own or play the spoiler and, if so, for whom?
Eastern Uttar Pradesh took an active part in the freedom struggle and has been a hot bed of politics for long. With the passage of time, people have become politically aware and have responded to leaders like Ram Manohar Lohia and Chaudhary Charan Singh in the past.
“But as you can imagine, this is a snakepit,” quips a regional Congress leader. “It is going to be an uphill task for Priyanka Ji. She has very little time, less than two months, before the general election and it would certainly require a Herculean effort on her part,” he quips.
But that she means business became evident in less than 48 hours of her arrival in Lucknow, when she, flanked by the general secretary in charge of western UP Jyotiraditya Scindia and Keshav Deo Maurya of Mahan Dal, announced a poll alliance with the small party active in western UP.
“I welcome Keshav Maurya ji. We will fight the elections jointly. Rahul ji has given us the task of creating a political atmosphere in which everyone is taken along and all sections of the society are represented,” Priyanka said. “We will contest with full might,” she asserted.
Predictably, the Bharatiya Janata Party, which desperately wants to ensure that it does not lose too many of the 71 constituencies it won in 2014, has reacted with disdain in public. But its growing concern at Priyanka Gandhi Vadra catching eyeballs, time and space in the media, especially Television, is manifest in even casual conversations.
“Television has been Modi Ji’s turf and we have milked it for the past five years and more. But suddenly TV channels are devoting considerable time following Priyanka Gandhi Vadra and discussing the impact she may have,” admitted an old BJP hand. While the BJP has largely bought media space, he grudgingly conceded that the Congress was receiving ‘ free publicity’ ever since it was announced that Priyanka Gandhi Vadra would formally hold charge of eastern UP.
The party is divided on how to counter the threat posed by her. While knives are clearly being sharpened to launch vicious attacks as and when she starts moving out and address public meetings, there are doubts that the move might boomerang and fail to yield much political dividend.
Ignoring her is another option that has been discussed, confide BJP insiders. But the thinking is to evolve a strategy as and when she slips. BJP leaders believe that while she possibly has a better command over Hindi, she eventually may not prove to be much of an orator.
“Election rallies require rousing speeches, sharp barbs, an ability to get the crowd to laugh and rage – and there is no match for Narendra Modi,” says a BJP leader with satisfaction, convinced that Priyanka Gandhi Vadra is far too polished to make much of a difference on public platforms.
Another BJP strategy is to belittle her experience and performance in the pocket boroughs of the Congress in Amethi and Rae Bareli. “How many Assembly seats could she win for the Congress,” is what BJP workers have been advised to ask in public in an attempt to play down her impact.
But the worry shows and notwithstanding their stance in public, on Monday Chief Minister Yogi Adityanath abandoned a review meeting with district magistrates to huddle with senior party leaders following the six-hour road show in Lucknow by Priyanka Gandhi Vadra.
Says Alok Kumar Rai of the Faculty of Management Studies at BHU (Varanasi), “The strategy of playing down Priyanka Gandhi may actually have the opposite effect.” The attack on the dynasty, say observers, is stale and weak and the other approach, of saying that Priyanka Gandhi Vadra has been inducted to cover up the failure of her brother, may actually enhance her public stature.
By all reckoning, Priyanka Gandhi Vadra’s entry into UP politics seems to have upset all political applecarts, at least for now. Keshav Dev Maurya of Mahan Dal (right), a small party in western Uttar Pradesh, announced on Wednesday that it would contest the election in alliance with the Indian National Congress. He is seen in this picture with Jyotiradiya Scindia ( left) and Priyanka Gandhi Vadra
Partners again: Pragmatic compulsions push BJP into making up with estranged ally Shiv Sena
The seat sharing deal between BJP and Shiv Sena ends over four years of public bickering between old allies, stemming from BJP’s unwillingness to settle for junior partner status in the 2014 Maharashtra assembly polls. Both parties fought separately and BJP came on top winning 122 seats against Shiv Sena’s 63. Later, Sena joined the state government but its resentment at not being the dominant partner showed, as it continued hurling barbs at BJP.
Sena’s barbs would have hurt BJP more than the opposition’s because both parties’ bases overlap significantly. Yet both needed each other and this kept the alliance in place. The seat sharing deal with Sena is an acknowledgment by BJP that the downside risks of fighting Lok Sabha elections without its ally-cum-foe are too forbidding to ignore. A similar situation forced BJP to part with 17 seats for JD(U) in Bihar. In making peace with former critics like Uddhav Thackeray and Bihar chief minister Nitish Kumar, BJP appears to have concluded that 2019 is too close to call.
Anti-incumbency and the newfound resolve among opposition parties to prevent division of their vote could be behind BJP’s mellowing, as it shores up alliances through generous seat sharing arrangements. In Maharashtra, Congress and NCP are reviving their alliance and reportedly wooing smaller parties led by Prakash Ambedkar, Raju Shetti and Raj Thackeray. Recall that the Congress-NCP alliance won three successive assembly elections before being felled by the Modi wave of 2014. BJP may rue the surrender of gains it made vis-a-vis the Sena in Maharashtra but coalition arithmetic demands such sacrifices.
In the 1990s it was BJP that propped up Nitish after his split with Lalu Prasad. The investment paid handsome dividends when the JD(U)-BJP coalition stormed to power in Bihar in 2005. In 2017, when JD(U) was again on a weak wicket, BJP played a masterstroke to woo it back. As a result, NDA may fare better in Bihar after the lashing in the 2015 assembly polls. BJP president Amit Shah had preferred a maximalist approach to politics earlier, but that is taking a backseat now due to pragmatic compulsions. Recall that the north-east was also won through alliances. Both BJP and Shiv Sena have an opportunity to put the past behind them. But selling the alliance to voters after Sena’s incessant criticism will be a tricky proposition.
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