Sunday, December 05, 2004

Attack of the Free-Market Liberals?

A few days ago, I posted a comment on Jacob's blog dealing with my reservations about market-based policies for solving health care and environment issues. However, the very next day I open the Independent Weekly, a solidly progressive Raleigh area rag, and I see this article by Farnum Brown.

Brown addresses the following dilemma: this recent election means that most progressive agenda is all but DOA on the Hill for the next four years. So what should we do about it? Brown suggests a strange proposal - turn to that notorious bastion of liberalism known as Wall Street.

Brown's argument roughly goes as follows - liberals can use their power as investors and consumers to turn corporate policies into progressive policies. He credits these ideas for everything from environmentally responsible logging by timber giant Boise Cascade to gay-friendly hiring policies by 318 companies in the Fortune 500.

Brown makes a point. Those of us heavily invested in the stock market can use our power as investors for progressive ends. Progressive shareholders can vote on proposals, buy and sell as a block to send a message to corporations. As Brown puts it: "These actions aren't the result of enlightenment suddenly dawning in boardrooms across America. They're rather the cumulative result of years of cooperative effort by issue-oriented non-profits on one hand and progressive shareholders on the other. Their goal has been to translate the social and environmental concerns of the former into the bottom-line concerns of the latter. And to then take those concerns to one of the few places progressives can still get something done in this country: the annual shareholder meetings of major publicly held corporations."

Combine this with a strategy of socially responsible consumerism, and you have a progressivism that doesn't need the government to succeed.

Of course, Brown's point only goes so far. This doesn't help poorer progressives who don't have the means to invest - as a result, the concerns of the working class aren't as likely to get addressed. (Note that Brown claims victories on gay rights and the environment, but not on labor rights or health care.) Wall Street's solutions will always be short-term - Big Business' progressivism comes in short-term bursts. And there are so few labor-friendly retail outlets (not to mention manufacturers) out there that labor-friendly consumerism will, at this point, lead to a pretty shitty Christmas season for your loved ones. (Seriously, you try buying clothes that aren't sweatshop-produced.) We're so deep in the Wal-Martized economy that wild horses would have trouble dragging us out of it. For that reason I still don't think business-based progressivism is going to solve all our problems - government will likely still need to give the Street a swift kick in the pants here and there.


Anonymous said...

Well, but since our current government isn't going to kick Wall Street anytime soon (aside from New York AG Eliot Spitzer doing a little corporate crime-busting here and there), I suppose Brown's ideas are better than nothing. It would require lot of organized work...activism of a sort unfamiliar to the long-haired activists I occasionally interact with.

Despite my misgivings about the market as I expressed in Jacob's blog, I actually disagree with you about emissions trading, at least if it's done on a more local scale. On the national scale you're talking about, yes it's ridiculous. But I don't think that's how it's least that's not how it's been described to me.

Let's say you want to cut pollution in, say, Cleveland by 1/3. One way you ("you" meaning the goverment) could do this is by mandating all factories cut their pollution by 1/3. But there's a more cost-effective way to do the same thing. Allow emissons trading shares amounting to 2/3 of the pollution in the city. Then you set the price of shares. The factories for whom it is cheaper to cut pollution than to buy the shares will cut their pollution to the cheapest level. The factories that have a more difficult, costly time cutting pollution will buy shares. In the end, you will still have cut pollution by 1/3, but the overall cost of that cut is less.

I can hear you potentially objecting that there would be some unfairness....that somehow all the pollution will end up over poor neighborhoods or something. Well, from living in Southern Smogville (Atlanta) I can say that air pollution ain't that discriminate.

So I actually think emissions trading is a good idea. Unless you want to cut all pollution entirely, in which case you better figure out a brand new method of manufacturing. (Hey, you're the chemical engineer!)

- Ben

Anonymous said...

This article reminds me of a conversation with a fellow liberal (read: libertarian) last week about the possibility of a left-wing/Wall Street alliance. We agreed that there a lot of people in the business world who are disaffected with the religious right and who would be glad to jump ship to the Democratic Party IF the Dems adopted market-friendly policies. Perhaps four more years under Bush will help that relationship develop.

The idea in the article you mentioned is certainly an approach worth taking, though I'm skeptical of how much of its past success is due to power wielded by progressive shareholders compared to that of the companies' desire to have a good public image. It's a point that I think is missed by many anti-corporatists, like Naomi Wolfe (author of "No Logo"): having a recognizable brand helps make companies accountable to consumers, investors, and the media.

Ben's post about emissions trading is spot on. I would only add that pollution in poorer areas is hardly a consequence that would be exclusive to an emissions trading regime. That outcome already results from wealthier people choosing where they live and using their political influence to enact "NIMBY" measures that protect their property values.

If you'll forgive the self-promotion, I'll point out one other example of how markets can be embraced for environmental good. It's a post I wrote on about "predator friendly" meat:

-- Jacob