The economic ideas behind the 'Great Reset'

Terence Corcoran: The murky rise of Klaus Schwab's stakeholder 'capitalism' and the WEF's Davos corporate plan | Financial Post:

January 22, 2021 - "For several years now the World Economic Forum [WEF], host of the annual corporate celebrity bash known as the Davos Summit, has been a driving global force behind a move to overthrow market capitalism and profit-maximizing corporations and replace them with a new economic model called 'stakeholder capitalism'.... In the words of Klaus Schwab, the 82-year-old German economist who founded the WEF in 1973, the existing corporate enterprise model, the shareholder version that has dominated much of the world’s economic progress over the past century, needs to be replaced. 'We need a change of mindset, moving from short-term to long-term thinking, moving from shareholder capitalism to stakeholder responsibility. Environmental, social and good governance have to be a measured part of corporate and governmental accountability.'

"With the U.S. government now under Democratic Party control, a reformation of capitalism appears to be underway. 'It’s way past time we put an end to the era of shareholder capitalism,' said Joe Biden when he outlined his platform last July.... An army of academics, consultants, executives and politicians is already on board the stakeholder movement....

"Schwab claims to have invented the stakeholder concept as a replacement for the shareholder version of corporate purpose most often associated with Nobel economist Milton Friedman. But in fact Schwab’s stakeholderism ... has a long and messy history.... Ending shareholder capitalism by merging private enterprise with government power is not a new idea....  In the United States, the idea ... reached a peak of sorts in the 1970s when Ralph Nader ... proposed a U.S. federal charter of major U.S. corporations 'whereby a government gives the corporate entity existence and that entity, in return, agrees to serve the public interest'.... Nader’s call for a U.S. government 'federal charter' for corporations was revived in 2018 by Massachusetts Sen. Elizabeth Warren. She proposed an Accountable Capitalism Act that would force American corporations with more than $1 billion in annual revenue to obtain a federal charter.... Corporate directors would be obligated to consider the interests of all corporate stakeholders, 'including employees, customers, shareholders, and the communities in which the company operates'....

"University of Calgary economist Randall Morck, editor of A History of Corporate Governance Around the World, sets the origins of legalized stakeholderism in Germany and the passage of the National Socialist government’s Shareholder Law of 1937. The law, writes Morck, 'freed corporate managers and directors of their specific fiduciary duty to shareholders and substituted a general duty to all stakeholders.' A paper in the 1938 issue of The American Economic Review described the new German corporate model as an application of the leading ideas of the German government at the time. The objectives of the law included 'protection of the interests of the public, employee and company by granting the state broad powers of intervention.' All forms of economic activity must observe the principle of 'public welfare before individual gain.' Beyond Germany, during the early years of the 20th century, many theorists and corporate executives embraced stakeholderism....

"The current effort to 'put an end to the era of shareholder capitalism,' as Biden said, aims to undo the free-market foundations of shareholder capitalism.... 'We must move on from neoliberalism in the post-COVID era,' says Schwab. We need to abandon the 'sacred cows,' such as 'free-market fundamentalism,' ...'start to build institutional platforms for public-private co-operation.' In his new book ... Schwab lists the four key power sectors that would sit at the corporate governance table: governments, civil society, corporations, and such international organizations as the United Nations. In that model, shareholders are likely to end up standing in line behind stakeholders — and stateholders.

"Shareholders are already taking a back seat. Corporate managers today fund the arts, finance political parties, give to charities, declare their climate-change activism and set up multimillion-dollar foundations that sponsor radical environmentalism. Supporters of the stakeholder movement include major institutional investors, accounting organizations, agencies and giant consultancies seeking to cash in on the corporate need for advice.... Canada’s top government-based pension plans, from the Canada Pension Plan Investment Board to the Ontario Teachers’ Pension Plan — the country’s largest shareholders — are now backing the stakeholder movement....

"Overhanging the stakeholder juggernaut is the total absence of any method to measure the performance of stakeholder governance. Randall Morck at the University of Calgary argues that loading multiple social and political responsibilities ... on to corporate executives and boards would likely lead to gross distortions in corporate decision-making at the expense of shareholders. 'Presented with a multitude of objectives, the decision-maker ends up focusing on none. Thus, with no way to keep score, stakeholder theory leaves top corporate managers unaccountable for their actions'....

"Two Harvard law professors — Lucian Bebchuk and Roberto Tallarita — recently described what they refer to as 'The Illusory Promise of Stakeholder Governance.' Stakeholderism, they conclude, 'would insulate corporate leaders from shareholder pressures and make them less accountable.” Even more bluntly, Bebchuk and Tallarita argue that the rise in support for stakeholderism among corporate leaders and their advisors 'is motivated, at least in part, by a desire to obtain insulation from hedge fund activists and institutional investors. In other words, they seek to advance managerialism by putting it in stakeholder’s clothing.' The result would be detrimental to shareholders and the economy. It would also, they add, undermine the achievement of stakeholder objectives. 'For those interested in addressing corporate externalities and protecting corporate stakeholders, embracing stakeholderism would be counterproductive.'

"Scholarship on the purpose of corporations dates back centuries, but the current prevalence of 'stakeholder capitalism' theory in law, economics and politics is an affront to fundamental principles. How can they call it 'capitalism' when the result would be the destruction of capitalism as we know it? Call it what it is: Stateholderism. That seems to be the plan."

Read more: https://financialpost.com/opinion/terence-corcoran-the-murky-rise-of-stakeholder-capitalism

Economists urge Trump to reject protectionism

National Taxpayers Union - More Than 1,100 Economists Join NTU to Voice Opposition to Tariffs, Protectionism:

May 3, 2018 - "The current political moment has seen new trade barriers erected as well as additional threats to rescind trade agreements and play politics with trade conventions that have benefited everyone. National Taxpayers Union is joined by more than 1,100 economists urging opposition to this new economic protectionism in the following letter.

May 3, 2018
Open Letter to President Trump and Congress:

"In 1930, 1,028 economists urged Congress to reject the protectionist Smoot-Hawley Tariff Act. Today, Americans face a host of new protectionist activity, including threats to withdraw from trade agreements, misguided calls for new tariffs in response to trade imbalances, and the imposition of tariffs on washing machines, solar components, and even steel and aluminum used by U.S. manufacturers.

"Congress did not take economists’ advice in 1930, and Americans across the country paid the price. The undersigned economists and teachers of economics strongly urge you not to repeat that mistake..... [note -- the following text is taken from the 1930 letter]

"We are convinced that increased protective duties would be a mistake. They would operate, in general, to increase the prices which domestic consumers would have to pay.... Construction, transportation and public utility workers, professional people and those employed in banks, hotels, newspaper offices, in the wholesale and retail trades, and scores of other occupations would clearly lose.... The vast majority of farmers, also, would lose....

"Our export trade, in general, would suffer. Countries cannot permanently buy from us unless they are permitted to sell to us, and the more we restrict the importation of goods from them by means of ever higher tariffs the more we reduce the possibility of our exporting to them. Such action would inevitably provoke other countries to pay us back in kind by levying retaliatory duties against our goods.

"Finally, we would urge our Government to consider the bitterness which a policy of higher tariffs would inevitably inject into our international relations. A tariff war does not furnish good soil for the growth of world peace."

Read more: https://www.ntu.org/governmentbytes/page/economists-join-ntu-to-voice-opposition-to-tariffs-protectionism
'via Blog this'

20th-century libertarian beginnings traced by anti-libertarian group

from "Against the Libertarian Party" | Jacobin - Branko Marcetic:

November 4, 2016 - "The modern libertarian movement has its roots in the 1930s, when a host of business leaders, terrified by Roosevelt’s New Deal, set up a series of overlapping organizations to oppose what they saw as a government incursion.

"One such group was the American Liberty League, founded in 1934 by executives from General Motors, US Steel, and other corporations, as well as three members of the du Pont family (who owned the DuPont Chemical Company).

"Another was the Volker Fund, a charitable trust set up in 1932 by Kansas City businessman William Volker (who put his nephew Harold Luhnow in charge). The fund sponsored various right-wing initiatives, such as the Mont Pelerin Society, an annual summit of pro-market scholars, journalists, and businessmen. It also helped subsidize the careers of various free-market intellectuals, such as Ludwig von Mises (“the fountainhead of modern libertarianism”) and, even more importantly, Friedrich von Hayek (whose 1947 book Road to Serfdom is widely viewed as kickstarting the free-market right’s intellectual resurgence).

"Two of the nascent movement’s most important backers were also drawn from the ranks of corporate America: J. Howard Pew, president of Sun Oil, and Jasper Crane, the former executive vice president of DuPont Chemical.

"Both had helped lead the National Association of Manufacturers (NAM), a vehemently anti-union business organization. Pew went on to bankroll the Liberty League, as well as conferences, advocacy groups, and the conservative Christian organization Spiritual Mobilization, which put out the Christian libertarian magazine Faith and Freedom in the 1950s. Crane helped organize, and used his business connections to fund, the Mont Pelerin Society and a whole host of other initiatives. He, along with the du Pont family, would go on to donate to Barry Goldwater’s campaign in 1964.

"Perhaps the most important libertarian cause Pew and Crane were involved in was the Foundation for Economic Education (FEE), an organization that sought to teach the public about libertarian ideas.

"Both acted as trustees, joined by an array of corporate executives: Donaldson Brown, a former executive of both DuPont and General Motors; Erle P. Halliburton, the founder of Halliburton; A.C. Mattei, the president of Honolulu Oil Corporation; Hughston McBain, president and chairman of Marshall Field & Company; W.C. Mullendore, executive vice president of the Southern California Edison Company; Charles White, president of Republic Steel; and B.E. Hutchinson, chairman of Chrysler’s finance committee. (The Volcker Fund’s Harold Luhnow was also a trustee.)

"Pew and Crane’s participation in the libertarian movement and its corporate circles didn’t end there. The pair sat on the board of the Freeman, the movement’s flagship magazine, alongside a smattering of businessmen.

"Major firms bankrolled the Freeman through advertising that doubled as ideological propaganda. Instead of touting their products, major firms like Chrysler, DuPont, Republic Steel, Marshall Field, General Motors, and Sun Oil — whose executives, past and present, were involved in the FEE and older anti-New Deal groups — took out ads promoting the virtues of business and the free market. (During the 1950s and 1960s, General Electric — also a frequent Freeman advertiser and a member of NAM — featured the publication on its anti-union reading list for managers and supervisors as part of its effort to delegitimize labor leaders.)"

Read more: https://www.jacobinmag.com/2016/11/libertarian-party-gary-johnson-ron-paul-president/  "
'via Blog this'

Laura Ingalls Wilder as 'libertarian matriarch'

The Legacy of Laura Ingalls Wilder, One of America’s First Libertarians | TIME - David Boaz:

May 9, 2015 - "Laura Ingalls Wilder is a bestselling author again, 83 years after she began publishing her Little House on the Prairie books and 58 years after her death at age 90. Pioneer Girl: The Annotated Autobiography is a 472-page edition of Wilder’s original memoir, for which she couldn’t find a publisher in 1930....

"Wilder was born just after the Civil War in the Big Woods region of Wisconsin. Life was hard on the frontier, and with her parents and then her husband she moved to Kansas, Minnesota, Iowa, South Dakota, Florida, and eventually Mansfield, Missouri. She also became, unexpectedly, a sort of libertarian matriarch.

"Laura’s only child was Rose Wilder Lane. Lane was born in DeSmet, South Dakota, and grew up on her parents’ Rocky Ridge Farm in Missouri. After high school she drifted to San Francisco, married briefly, and began a career as a writer.... [B]y the 1930s ... she was a staunch libertarian. In 1935 she wrote in the Saturday Evening Post:

I am now a fundamentalist American; give me time and I will tell you why individualism, laissez faire and the slightly restrained anarchy of capitalism offer the best opportunities for the development of the human spirit. Also I will tell you why the relative freedom of human spirit is better — and more productive, even in material ways — than the communist, Fascist, or any other rigidity organized for material ends.

"Those ideas can be found in the Little House books, which Lane is said to have helped edit or ghostwrite. In Little House on the Prairie, young Laura hears the Declaration of Independence read and thinks, 'Americans won’t obey any king on earth. Americans are free. That means they have to obey their own consciences. … When I am a little older, Pa and Ma will stop telling me what to do, and there isn’t anyone else who has a right to give me orders. I will have to make myself be good'....

"Lane wrote two novels of her own about her family’s homestead, Let the Hurricane Roar (later retitled Young Pioneers) and Free Land, which made her a bestselling, well-paid writer. But her interests turned more to politics, and she became a vociferous adversary of President Franklin Roosevelt and the New Deal, which she saw as 'creeping socialism'....

"In the dark year of 1943, during World War II, Lane and two other remarkable women published books that could be said to have given birth to the modern Libertarian movement. Lane published a passionate historical book called The Discovery of Freedom....

"Also in 1943 Lane met Roger MacBride, the 14-year-old son of her editor at Reader’s Digest. MacBride was fascinated by her ideas, visited her frequently at her Connecticut home, and came to think of himself as her ''dopted grandson.'

"[MacBride] was made a Republican elector in Virginia in 1972.... He cast his electoral vote for the new Libertarian Party ticket of philosopher John Hospers and journalist Tonie Nathan, the first woman to receive an electoral vote. He became the 1976 Libertarian presidential candidate and put the party on the map with ballot status in 32 states, a widely distributed campaign book, and a distant third-place finish....

"As Lane’s heir, he published another of Wilder’s manuscripts, The First Four Years, arranged for the popular 1970s television series, and wrote eight novels of his own about Rose’s early life, continuing in the vein of Little House."

Read more: http://time.com/3848967/laura-ingalls-wilder-is-back/
'via Blog this'