Responsible Ownership

“They are capable of shutting off the sun and stars because they yield no dividend.”  Eighty years ago John Maynard Keynes pinpointed the fundamental issues at work in the current Euro crisis.  In his great essay, “National Self-sufficiency”, he pointed out that laissez faire economic principles carried over from the 19^th century were incompatible with the international financial operations emerging in the 20^th century, because they divorce financial control from the responsibilities of ownership. Applying “pure” free market principles of profit optimization to far-away peoples and places causes us to prefer building slums over alabaster cities in order to make more profit.  We tear down mountains to mine the coal underneath if we do not have to look out the window each day at the wrecked lives and forests left behind.  We blow up underground shale deposits to get at the natural gas unless we have to drink the poisoned water. And we destroy the economies, cultures and people of other countries to assure a maximum return on our investment.

One of the great assets, as I’ve mentioned, of multi-national corporations is their portability.  The corporate bankers from all over Europe who are discussing whether keeping Greece in the Euro zone is really worthwhile are demonstrating that portability is also the corporation’s greatest vice.  For their sense of ownership does not include even the continent on which they live. They would, to paraphrase Keynes, destroy the dream of a united and peaceful Europe because there was no profit in it. 

Pure free market economics assumes a set of shared cultural values and norms that regulate its transactions “outside the system”, or it becomes coercive and rapacious.  A purely economic union between distant nations who do not share key cultural values cannot optimize profit for everyone. The fixed exchange rate of the Euro works to Germany’s advantage, but not to that of Greece; so also with the common interest rate across the EU.  German bankers see the debt problem in terms of a broken deal; Greek politicians see the problem in terms of the ravages of a 22 percent unemployment rate, an economy that has gone down over 25 percent and ruined lives. Some accommodation outside the formulas of profit optimization must be sought.  Europe is, in a sense, fighting for its soul.  It appears that this is beginning to dawn upon the bankers and politicians and is driving them close to a nervous breakdown. The stridency of their mutual accusations may actually be a positive sign, to the extent that it signals that each side recognizes they cannot get everything they seek. It is time they all lift their eyes to a greater dream.

The issue, though, goes well beyond being just a Euro zone crisis.  It could also be looked at as a first battle between multi-nationals and nations in a war that could continue throughout the 21^st century. For it represents the first highly visible attempt by multi-national corporate interests to dictate the economic terms of life to an entire country.  More are sure to follow.  It behooves us all to be sensitive to the requirements of responsible ownership.