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January 14, 2006

Wal-Mart For NeoLibs

NeoLibs (or, if you prefer NeoProgressives) such as Matt Yglesias, Jonathan Cohn and Ezra Klein are troubled about this week's news that the Maryland legistlature shot down a veto by their Governor and passed legislation requiring Wal-Mart to pony up more health benefits for Wal-Mart employees. The NeoLibs argue workers would be much better off if liberals, progressives and others sought an alliance with Wal-Mart allowing Wal-Mart to continue its current meager benefits practices in exchange for Wal-Mart helping to get federal action for things like universal health care. Look, these NeoLIbs say, we live in a Darwinian world where corporations spend "98 percent of their effort maximizing profits and share prices". Let's be real, let's be tough guys and let's cut a pragmatic deal with the Wal-Marts that let them continue to profit maximize while they help us get federal legislation to overcome the effects of their profit maximizing ways (in this case, the effects of having workers with low wages and little to no benefits).

All of which qualifies Klein and pals for a Wolfowitz award for Naive Pragmatism -- those proposals in which reality exists only as a subset of fantasy.

The world we actually live in -- as opposed to the Naive Pragmatic world of Washington parlor policy -- is one of markets, networks, organizations, friends and families. In this world, organizations are the most powerful crucible for experiencing community (thick we's) whose common good for all involved contributes to the greater good of society -- for finding non-governmental approaches to fairness, justice and equity among other things. If we can find approaches that work inside organizations, we ought to be looking for them. But that begins with this: Shareholder value fundamentalism is as dangerous to the stability and sustainability of our new world of markets, networks and organizations as is any religious fundamentalism.

The NeoLibs like to sound tough with their acknowledgement and agreement about profit maximization. But, like Wolfowitz, they evidently have little real world experience in such organizations. They have a single answer to all problems: let the corporations profit maximize and turn to government to fix the problems created. This logic is profoundly flawed.

Start, for example, with this proposition: when seeking solutions to problems, identify and address the root causes of those problems. Extreme profit maximization -- single answer fundamentalism -- is a root cause of the lack of health care for folks who work at Wal-Mart. Proposing to solve this by reinforcing the practice of extreme profit maximization -- the root cause of the problem in the first place -- makes no sense. It's like trying to fix all manufacturing quality problems by inspecting finished products as opposed to building in quality at each step along the way. (Another root cause, of course, is a government policy grounded in extreme individualism, in putting all risks and rewards on an individualistic basis instead of blending in policy promoting shared risks and shared rewards. In criticizing the NeoLib recommendation to align themselves with extreme profit maximizers, I'm not suggesting that complex challenges such as fair and just access to health care is entirely solvable without a government willing to re-balance "me" and "we". But, even then, any effective government policy would acknowledge that, in our new world, the most real 'we's' beyond friends and family are found in organizations -- not places we call towns and neighborhoods.)

Solving problems by addressing root causes of problems ought to be a straightforward enough concept. At a more conceptual level is this: No corporation -- indeed no organization of any kind, whether for profit, non-profit or governmental -- can sustain performance without having that performance benefit all those who matter to the enterprise: supporters/shareholders, employees/exectuives, and customers/beneficiaries. "Performance" is the measurable evidence of an organization's common good -- the mission, vision, strategy and so forth by which the organization seeks and achieves what's needed by the organization's supporters/shareholders, employees/executives, and customers/beneficiaries.

In the NeoLib fantasy, there is only one constituency: shareholders. Which, of course, begs this question: "Hey, why stop at benefits? Why not encourage Wal-Mart to lower wages, convert all jobs to no more than two years in length, and, while we're at it, lock employees in at night and turn off the time clock?"

If profit maximization is the single answer to all important questions, then there are no limits to what we -- as a matter of public policy -- permit profit seeking firms.

Sustainable organization performance demands balancing and blending the interests and benefits of shareholders, employees and customers. That's pretty much standard among folks in the private sector who spend far less time in Washington DC cocktail parties than the Neo folks, whether NeoCons, NeoLibs or NeoProgressives.

That crowd, however, is comfortable with policy recommendations, like this instance, that leave the real human beings who work at Wal-Mart struggling in poverty and ill-health while (1) Wal-Mart continues to generate unsustainable profits for executives and shareholders; and, (2) some theoretical set of forces are working their way toward federal legislation and the implementation of that legislation that supposedly will -- in a very distant future -- bring relief to these workers and their families.

At it's core, the NeoLib fantasy suffers from the same phenomena as the NeoCon fantasy: utter disregard for real people, real facts and real time

Posted by Doug Smith on January 14, 2006 12:56 PM | Permalink

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