Poverty Impeding Development

In the 1980s, the advent of some newly-industrializing countries (NICs) in east Asia, such as Taiwan and South Korea, was generating excitement around the world that the gap between the least developed countries (LDCs) and the developed countries (DCs) then had a viable bridge through foreign direct-investment; that is, what had been a dichotomy was becoming a spectrum. The hope that globally-circulating capital might raise even the LDCs out of poverty. Of course, there was scarce any thought that the combined pollution of an economically developing world would raise global air and sea temperatures above 1.5C. Human beings are too near-sighted for that, and, of course, there is the allure of profits and higher salaries and wages. Also, the sheer inexorability, or stubborn persistence, of poverty in scaring off rather than being lifted up from foreign-direct investment may have been minimized by the hope. Roughly forty years later, Oriana Bandiera of the London School of Economics spoke on the theory that economic opportunities are impacted by how much wealth a person has at the outset—the alternative theory being that the opportunities are just as good for the poor as for the rich because differences are due to exogenous (i.e., outside) factors. The micro-level condition of a country’s poor impacts the attractiveness of a country to foreign direct-investment.

Poor people are more likely to be doing casual, self-employed work than running a small business or raising livestock, according to Bandiera. Wage-labor tends not to go to the poor. Sustenance-level casual work, which is not as regular as wage-labor, is typically not enough to accumulate savings, which could be spent on training or education, or to buy livestock or equipment to increase production of crafts such that economies of scale might be realized. A bimodal structure thus emerges with equilibria being at subsistence level and middle-class, but not in between them. In terms of public policy, craft-oriented small-business loans can perhaps increase the number of poor people who can enter the interim space between the two equilibria. Only governments would be willing to take the risk, and should be willing to make sure that the loans are not spent on consumption, for pressing consumption needs are part of the reason why the poor do not save money on an ongoing basis.

Similarly on the macro level, the Asian NICs were distinguished from the LDCs in Latin America in the 1980s because only the former group had governments strong enough to withstand the political pressure from the people for increased government spending for consumption. Strong states, even if they are authoritarian rather than democratic, can resist popular pressure to exhaust government coffers by expanding entitlement programs. That by 2025 several E.U. states had deficits and debts greater than the limits prescribed by the Stability and Growth Pact and those governments faced no real accountability from the E.U.’s federal government adds support to the argument that democracy may be at odds with sustained and balanced fiscal policy unless, as the U.S.’s Thomas Jefferson and John Adams agreed, the citizenry who vote (i.e., the electorate) are educated and virtuous.  

In terms of business, enterprises in LDC’s tend to be smaller than those in developed countries (and NICs). Smaller organizations are less competitive in trade because they cannot realize the benefits of economies of scale. Such organizations also have less job-specialization and job variety. Bandiera even referred to the labor of such companies as a “disassociated group of self-employed.” Additionally, the CEOs of those enterprises tend to be managers more so than leaders, meaning that those CEOs spend more of their time oriented to functions inside the organizations and less time oriented to external stakeholders and even society as a whole. Visionary leadership is something that the head of a small business in a developing country cannot afford.

Even in business schools in developed countries, the business field of business environment has a place similar to that of Pluto in the solar system. Situating the field of business ethics within business environment is logically and conceptually dubious—but not to worry; few “scholars” of business ethics have actually studied philosophy, of which ethics is a subfield. One business ethics “scholar” at MIT told me in 2024 that ethics is actually situated in sociology rather than philosophy. Being in the humanities, I only smiled and wished her well. Rather than copy the business systems of developed countries, perhaps LDCs should grow their own varieties. The question is perhaps whether the governments should first not only invest in infrastructure, but also underwrite small-business loans to a sufficient portion of poor households before enticing foreign direct-investment. After all, forests develop in stages.

An Analysis of the 2024 U.S. Presidential Election: On a Party's Self-Serving Elite

The 2024 U.S. Presidential election warrants a post-partem analysis, not so much to affix blame, but primarily so the electorate might grasp the perils when the elite of a political party refuses to apply self-restraint in order to keep the party-wide platform and campaign speeches from reducing to the elite’s own favorite ideology even though it is not held by a significant number of the “rank and file” members (i.e., voters), not to mention independents. In other words, running a massive political party to serve the ideological agenda of what Bertrand Russell calls “the inner ring” can cost a party dearly on election day. I contend that this applied to the Democratic Party, which had become a center-left party still dependent on its non-college, working-class, members, whose cultural values were not necessarily progressive. To be sure, substituting managerially-oriented political calculation for visionary leadership and broad policy proposals that are based on principles rather than particular political interests can easily be perceived generally as small, especially in the context of the horrific military attacks against civilians in Ukraine and Gaza. It is paradoxical that Harris lost working-class voters who were socially conservative, and thus “anti-woke” (e.g., against men in women’s bathrooms and playing in women’s sports) even as she lost some liberals who believed that Harris, in explicitly stating on The View that she would not deviate from Biden, was too timid in standing up to Russia’s Putin (e.g., by withholding long-range missiles) and Israel’s Netanyahu rather than enabling the horrific military crimes against humanity with continued shipments of weapons as if the UN’s court were irrelevant to international law.

I begin with the immediate historical context of center-left parties. The parties on the left in the U.S. and E.U. shifted to the center in the 1990s and 2000s. The parties were able to pick up moderate voters, but at the risk of losing ideological distinctiveness (from the center-right parties), and thus their raison d’etre in terms of broad principles and policies.  The 2024 U.S. Presidential election can be fit within the broader shifts since the 2000s that have rendered center-left (rather than far-left, or even socialist) parties less successful in elections. Bill Clinton brought the Democratic Party closer to the center in part due to the losses of Edward Kennedy in challenging the center-left Jimmy Carter in 1980 and of Walter Mondale in challenging Ronald Reagan in 1984. The party’s political elite paid attention to these losses, which went down like lead balloons, and Bill Clinton was a result of the ensuing effort to move the party closer to the political center. Crucially, both he and Barak Obama were able to win with support from the middle class (i.e., labor), which was still primarily voting on the basis of economic interest, including redistribution.

Then, two shifts began that caused the Democratic Party’s working-class, relatively conservative, faction to gradually peel off. The first shift can be described as a negative reaction to the increasingly business-friendly aspect of the party moving to the center. Historically, center-left parties in North America and Europe were critical of capitalism and wanted to constrain it. In reaction to the financial crisis of 2008, however, center-left parties let go of the even more important role of constraining capitalism that had frozen up from within due to uncorrected increased market volatility.

In the E.U. state of Greece, for example, the Syriza Party campaigned against austerity measures during the state’s legislative election in 2015 by promising to renegotiate the state’s bailout agreements. However, just after winning the election, the party’s head, Prime Minister Alexis Tsipras, accepted the existing austerity conditions in spite of there having recently been a referendum in which the Greek citizens overwhelmingly rejected those very conditions. Considering that the austerity resulting from the government’s required budget-cuts was especially harsh on the working class, Tsipras’ betrayal in going along with the creditor-beholden E.U. state of Germany doubtlessly cost the center-left party votes and Tsipras was ultimately defeated (though strangely, after being reelected again).  

In the U.S., Barak Obama entered the office of federal president in 2008 at the worst of the financial crisis, and he stocked his administration with plenty of folks from Wall Street. It is no coincidence that Obama went along with financial bailouts for the banks without conditions, even in terms of putting ceilings on the bonuses of the banks’ executives. Considering that they had displayed incredibly bad judgment in over-leveraging their respective banks by packaging and even buying bonds based on risky sub-prime residential mortgages, the bankers not only did not deserve bonuses, but arguably should have been fired as a condition of getting the funds appropriated by Congress and those created by the Federal Reserve Bank. Instead, the culpable bankers received hefty bonuses out of the TARP money provided by the U.S. Treasury—money that was supposed to be lent out to stimulate the economy so the working class would not suffer from traumatic unemployment. It was not lost on the Democratic Party’s non-college working-class segment that the incompetent but wealthy bank executives got bonuses in the political elite and the financial elite being cozy. Ironically, it was not until the first Trump administration that Treasury issued checks to every American.

Unfortunately, the trajectory of the partial unraveling of the Democratic Party is not so simple, for it was not only the growing perception that the party had joined de facto with the Republican Party in siding with corporate America at the expense of workers that caused the latter to gradually but steadily peel off from the center-left party—after having asked, perhaps, what was still left about the Democratic Party.

Firstly, structural changes in the economy also had an impact. Economic inequality was increasing, and workers could see that the Democratic Party had done nothing substantial to stop even the increase. That the party had missed an opportunity to come up with its own, alternative economic policies with which to differentiate itself from the Republican Party was especially important because the Democratic Party had moved closer to the center, and away from the wing associated with U.S. senators Bernie Sanders and Elizabeth Warren.  

Secondly, another structural change, not economic in nature, also had an impact. Since 2000, a shift towards identity/cultural grievances had been occurring in the middle class wherein a gradually increasing number of voters have been less interested in economic redistribution than in opposing the “woke” ideology, which is centered on legalizing rights of certain groups of Americans based on group-identity. Historically, religious wars in Europe had been based on the premise that group-identity is primary in human consciousness; race riots share that assumption. The failure of the Democratic Party to constrain the excesses of capitalism during the financial crisis may be a factor in this shift away from economic distribution, as increasing numbers of working-classed voters came to realize that both major parties had become bought and paid for by the business sector through its political campaign contributions and promises of executive jobs. Regulatory capture of the regulator agencies by the regulated companies is but one result of the inordinate influence of business in government.

The shift in the American working-class voting increasingly on social issues affected the Democratic as a wedge. The “woke” ideology in favor of defunding the police, transsexual rights (i.e., men in women’s bathrooms and sports), reparations for Black Americans, sanctuary cities wherein illegal immigrants are legally protected, university “cancel culture,” such as in mislabeling pro-human-rights protests as antisemitic, and diversity programs gripped the political elite of the party and its left-wing more generally even though Kamala Harris did not emphasize “woke” planks in her speeches. Meanwhile, the “anti-work” political reaction had been gaining speed since at least 2015 among the non-college-educated working folks. This reaction viewed the gay “rainbow” flag as a cult symbol that was being imposed seemingly everywhere, and was viscerally opposed to transsexual men being able to play in women’s sports and use women’s locker rooms, the notion that illegal immigrants somehow had a right to be in the U.S. even though they had committed a crime in entering the country illegally, the proposal that even people living paycheck to paycheck should be taxed more to pay for reparations to Black people, and that certain words could no longer be spoken or written in college courses and even in political protests. Indeed, protests against Israel had practically been banned at many universities, including Yale, where 47 pro-human-rights students were arrested by private university police employees, and Harvard, which had turned Harvard Yard into a preemptive police presence by September, 2024. So much for academic atmosphere and academic freedom; non-academic employees with guns were in charge as scared academic administrators looked on as if proud mice.  My point is that Harris didn’t have to say anything “woke” on the campaign trail; non-college educated workers in the Democratic Party had by then viewed their party’s elite as very “woke” indeed. 

It can be argued that in having no internal check or self-restraint, the party's political elite had pushed the “woke” ideology too hard and too far (and perhaps, most importantly, too fast), and thus naturally had prompted a political reaction against both the elite itself and its favored ideology. That is, the political elite of the Democratic Party refused to constrain itself from pushing its mandatory ideology even though it was clear, or should have been clear without the blocking self-centeredness, that non-college-educated workers, especially in small towns, would bolt. Even with the mistaken assumption that the working class would still vote on an economic basis, the fact that the anti-woke movement was gaining steam should not have been missed or so easily dismissed for being illegitimate. Presumptuousness can indeed be blinding or distortive, as can the underlying self-centeredness and primitive desire to use power to enact one’s own ideology. This is ultimately why Donald Trump was able to win in spite of his own voters acknowledging that he was admittedly a flawed man.

The elite of a political party does its party a disservice by stubbornly pushing whatever ideology that elite loves, as if it were a fact of reason and thus should be imposed on detractors whether they like it or not, rather than applying self-discipline and a little humility to back off the ideology so as to retain the socially-conservative workers for the sake of governing to constrain capitalism. The ancient Confucian scholar, Xunzi, points to “a degree of self-restraint and even virtue, namely trustworthiness ,” as one reason why a hegemon, a ruler who is not as virtuous as is a sage (i.e., a wise and virtuous person) but is more virtuous than is a vicious tyrant, can be “a strong and successful ruler.”[1] Even though a hegemon “is not committed to moral cultivation of himself or those he rules,” applying the virtue of self-restraint, such as channeling away one’s instinctual urge to promote one’s own preferred ideology over others in a political party, can make a ruler successful (and not tyrannical) anyway.[2] The political elite of the Democratic Party could have benefited from this ancient lesson. That an increasing number of voters in the working class were more interested in voting against the societally interlarding “woke” ideology and especially its demands than in voting for economic redistribution means that the self-centered and haughty ideological stubbornness of the Democratic political elite really costed Harris votes.

Thirdly, even given the ongoing shift among working-class Democrats toward voting on the basis of cultural issues, economic pressure from the price increases, especially in gas and groceries, even after the temporary bump from supply shocks and higher transportation costs during the pandemic, prompted a significant number of voters in the middle class (and poor), which is especially vulnerable to price increases on necessities such as food and transportation, to vote on the basic of their bank accounts.

Harris’s promise to reduce grocery-store prices rung hollow because Biden had failed to do it and she said she would not differ from Biden on policies. Even given the trend in the working class to vote on the basis of social over economic issues, the center-left party erred in failing to recharge its historic mission to constrain the excesses of capitalism. Pledges to use federal anti-trust law to break up the meat-producer and grocery-chain concentrated rather than competitive industries would have differentiated the party from Trump’s rightward shift of the Republican Party. Even the Democratic Party, in accepting so much corporate money from lobbyists, was susceptible to enabling rather than lessening the tendency of markets to consolidate—to go from competition, by which food prices would have gone down after the supply shocks during the pandemic, to just a few giant companies with enough market-power to hold prices high and even convince consumers to expect even higher prices in the expectation of inflation as inevitable. As my academic advisor at Yale, who was an Episcopalian priest, once said, “If you must sin, then sin boldly!” Andrew Jackson and Teddy Roosevelt would not have lost much time translating that advice into political terms in terms of bold policy in place of political calculation and capitulation to even the private powers behind the proverbial throne. Unfortunately, neither Biden nor Harris was a Jackson or Roosevelt.

Fourthly, as for the shock that many “far-left” Democrats and even some independents had after the election that a convicted felon and narcissist had just won the popular vote (as well as the Electoral College), the explanation for Trump’s success with labor is not only due to the reasons I have just discussed, but also because Trump was very wealthy and bold in a way that vote-maximizer politicians usually are not. That these personal attributes could possibly “trump” the man’s flaws, such as admitting that he could get away with touching women sexually without their consent, allegedly pressuring Georgia to come up with more votes for him, and allegedly prompting a mob to riot through Capitol Hill as electoral votes were being counted by Congress on January 6, 2021, would shatter the ideological view held by the Democratic Party’s elite on what matters in a presidential character. Indeed, the nature of the alleged crimes may actually have augmented or strengthened Trump’s stature to working-class voters, given that their paradigmatic criteria for leadership differed so from those of the political elite (of both parties!).

Whereas America’s political elite and the left-wing of the Democratic party believed that voters should vote at least in part based on whichever candidate is most wise and virtuous, Trump himself might counter that the masses vote instead on the basis of wealth and being bold even in speech as well as action, rather unlike the typical people-pleasing politician, such as Bill Clinton and Barak Obama. Taking into consideration the fact that the level of education (college versus no-college) had been the single best indicator during the arduously long campaign “season” of which candidate a voter favored, it is likely that the criteria valued by the working class differed paradigmatically from the criteria valued by college-educated voters, including the political elite. Unconsciously, the elite of the Democratic Party projected its own paradigm of character-leadership onto how the non-college-educated laborers of the party’s “rank and file” see things. This can explain why even the criminal charges against Trump did not dint his base.

According to Adam Smith in his text, The Theory of Moral Sentiments, “the great mob of mankind are the admirers and the worshipers . . . of wealth and greatness.”[3] These two things are contrast to wisdom and virtue, which the masses “are perhaps incapable of even discerning.”[4] I don’t think Smith is being fair to the “masses” here, but his main point concerning the different criteria is important for college-educated Americans to grasp. Like people outside of a political (and economic) elite, Smith eschews “the proposition that people of superior wisdom and virtue possess a title to rule.”[5] He maintains that birth (family) and wealth are more visible and certain to the masses than are virtue and wisdom.[6] Wealth and greatness, Trump doubtlessly could have said during his 2024 campaign, “are my two middle names.” By “greatness,” even as he applied the adjective to the country itself in terms of its potential, consists not only of wealth, but also the kind of strength that is bold rather than timid, or limited to political calculation at home and abroad. Thinking that they too could someday be rich and admiring bold people, working-class voters could very well have loved him for being both. Again, the shift away from being concerned with redistribution to wanting to push back against the presumptuously encroaching, passive aggressive antagonistic “woke” advocates means that Trump’s “offensive” statements were viewed by the working-class as a plus rather than a minus in terms of character. In other words, few labor-union members would be likely to quote from Aristotle’s Ethics to insist that a virtuous person is necessary to put into effect Trump’s policies.

As for Trump’s pathological lying, the heads of the Democratic Party were hardly blameless in falsely claiming that Harris had been selected as the nominee in an “open, bottom-up” process. With a hundred days to go before election day, the party had time for a primary, which could have been set to take place forty days out, with the general election following after sixty more days. In the same year, the E.U. state of Germany set an election just sixty days after a scheduled no-confidence vote at a time in which that vote was just a month away. To claim that Harris’ chances were diminished by having only a hundred days fails to recognize that the year-plus long campaign season for U.S. president was excessively long. Lacking in boldness in terms of proposed policies was more of a hindrance than just having a hundred days. In other words, she had more than enough time to distinguish herself by departing from Biden’s policies, especially given his unpopularity for not going far enough in terms of a variety of areas. In fact, Harris’ lack of boldness took votes away even from the left-wing of the Democratic Party!

Going on the basis of political calculation, or “the political reality,” based on the presumed power of AIPAC (American Israeli Political Action Committee) in U.S. politics, produced political timidity just as cowering to corporate interests, even of the oil and food industries, presented Harris as a politician rather than as a leader. Leadership does not operate by calculation, but by broad principles. Whether those principles are standing up to an aggressor ravaging through Gaza rather than enabling him by being in favor of continuing to supply weapons to his military, or enforcing market competition (and a windfall-profits tax) rather than suggesting that the government give Americans money to spend in the oligarchic grocery chains that would feel free to raise prices even more rather than cut prices to compete for buyers, boldness of policy can be appreciated even more when it involves standing up to entrenched political and economic interests that have turned squalid in part because of the U.S. Government.

Management differs from leadership in part because management is narrowly focused and incremental rather than being oriented to formulating and promoting a vision of society in ideal, paradigmatic terms. I submit that both Biden and Harris were managerial in nature, whereas Ronald Reagan can be studied in terms of providing a vision (e.g., “Government is the problem.”). To be sure, not every vision that a political leader espouses is ethical. Hitler, for example, provided a vision of a strong Germany without weakness enervating the country from within. That vision can be challenged ethically both in regard to how Hitler conceptualized strength and weakness, and his government officials could be challenged for how they implemented Hitler’s vision by literally exterminating what they saw as weakness from the country and even in trying to free up living space for Germans from the U.S.S.R.—Hitler having promised Hindenburg that Communists would be eliminated within Germany, which in turn could mean going after the source further east.

What to a working-class Trump voter was boldness was viewed by some Harris voters and the Democracy Party’s elite as fascist. The claims that democracy was in the balance may have been fueled in part by the fact that Trump working-class voters tended to value wealth and political boldness over wisdom and virtue. To people who value or follow political calculation to minimize political risk, a candidate not speaking as a politician and advocating bold policies would of course be viewed with fear.

It is possible, even ironic in this case, that representative democracy can be put at risk by a cleft or division existing between a party’s elite and a significant part of its “rank-and-file” base. To be effective electorally and in sync with democracy itself, the elite of a party needs to remember that its perspective is not necessarily that of the whole of the party, and if the respective perspectives do indeed differ, the elite needs to exercise some self-constraint in place of self-centeredness and a self-assumed mandate to impose, ideologically, even on the party’s membership. In short, a party’s elite needs to put that membership first if electoral success is desired as a means to being in power.  The refusal to exercise self-restraint deserves to be voted against. Trump’s lack of self-restraint in his use of vitriol against his “enemies,” which included anyone who criticized him publicly, and even in his use of lying habitually to get out of trouble was in line with the boldness atypical of politicians that the working-class valued in a leader, whereas Harris’ lack of self-restraint regarding highlighting aspects of “wokeness” and in not standing up to big business and Israel worked against her. Not that Trump would stand up to big business, for he himself was a part of it, and not that he would stand up to Netanyahu (or Putin), but all that Trump too may have appealed to greatness-as-strength as construed and valued by enough of the the non-college-educated working-class voters.

1. Eric L. Hutton, “Introduction,” in Xunzi: The Complete Text, Eric L. Hutton, trans. (Princeton, NJ: Princeton University Press, 2014), p. xxviii.
2. Ibid.
3. Adam Smith, The Theory of Moral Sentiments, Ed. D. D. Raphael and A. L. Macfie (Oxford: Oxford University Press, 1976), I. iii.3.2.
4. Adam Smith, The Theory of Moral Sentiments, Ed. D. D. Raphael and A. L. Macfie (Oxford: Oxford University Press, 1976), VI.ii.I.20, quoted by Peter Minowitz, Profits, Priests, and Princes: Adam Smith’s Emancipation of Economics from Politics and Religion (Stanford, CA: Stanford University Press, 1993), p. 42.
5. Peter Minowitz, Profits, Priests, and Princes: Adam Smith’s Emancipation of Economics from Politics and Religion (Stanford, CA: Stanford University Press, 1993), p. 44.
6. Ibid., p. 45.

The Screen Actors Guild Strike: American Capitalism Is Inherently Unbalanced

On July 14, 2023, Hollywood actors joined the writers in going on strike against the studios, which had changed the business model in ways, according to the Screen Actors Guild (SAG), that were leaving the vast majority of actors out financially. At the time, AI (artificial intelligence) was the red-hot buzzword, promising unheard of advances but also baleful clouds on the horizon. The president of SAG sounded the alarm on not only the threat of AI given the studios' new business models predicated on ubiquitous streaming and digital technology, but also the more long-standing and ingrained American corporate system of Capitalism wherein upper managements get away with not sharing the surplus of corporate wealth due to an inherent or institutional conflict of interest. Indeed, Fran Drescher, the president of SAG, was not far from calling into question the taken-for-granted assumption in Capitalism that residual profits should go to stockholders exclusive. Questioning that default (as well as claiming that CEOs get to set their own compensation by controlling their respective boards of directors) would have made Drescher's announcement of a strike truly revolutionary. She was so close. 

Regarding AI, even Drescher's position can be perceived as short-sighted even though it was an improvement on the studios' new business model. The ability of studios to use the likenesses (images) of actors who have been bodily scanned (creepy) in one project for use as computer-generated “acting” in future movies in which the actors themselves are neither compensated nor participate was among the issues to be arbitrated in which the studios and SAG were far apart. To an actor, the loss of control over one’s image can complicate or even detract from one’s efforts to construct a public image. To be sure, not being paid for such extended likenesses being used was noxious to the actors even though no additional work on their part would be required. This just means, however, that royalties, or residuals, rather than pay for the use of the images would be appropriate, and thus fair. Furthermore, rather than being able to pressure actors on a project to agree to their respective likenesses being used in perpetuity, studios should be required to get permission for the specific uses (rather than a general permission) at the time of each future project. Actors would not feel that they might lose their existing work if they refuse to give a general permission in perpetuity. Even such an arrangement, incorporated into the studios' new business models, might not last long. A student of AI suggested to me that just as non-profit organizations have open-source libraries of written works, such organizations in the film industry might make available, royalty-free, images of volunteers that start-up film companies, students, and even Hollywood studios could use. Extras, or background actors, could conceivably be used only in shots in which mere images won't do. 

Of greater significance, SAG’s position extended to challenge a basic tenet of Capitalism itself. Were the strike a true inflection point, as Fran Drescher, the president of SAG claimed, the union had an opportunity to make the dogmatic, or arbitrary, tenet transparent if for no other reason that Drescher was aware and critical of the long-held assumption that had long before become embedded as a “necessary” plank in the economic system.

I contend that it is arbitrary to set the owners of a corporation as the receivers of the residual from the surplus of revenues over expenditures (i.e., profit), whereas banks and labor get only a fixed amount classified as expenses. All three groups can be thought of as providing inputs, or resources, that a management can use to make a profit. From this perspective, it seems arbitrary to say that only one of the group has a right to the residuals from the profits. The philosopher John Locke claimed that a person “mixing” one’s labor with land gives rise to a property right on said land. Centuries later, the U.S. Supreme Court ruled that a maker of wedding web-sites could refuse to have same-sex couples as clients because she had expressed herself in her work. It seems rather obvious that screenwriters and actors are also in an expressive profession. In “mixing” their self-expressive labor in a film, writers and actors can be said to have an ownership interest in what is typically referred to as art. Painters, after all, sign their paintings. It is possible that the writers and actors of a film have more of a claim on the profits than do the studios. In depicting the strike as occurring at an “inflection point,” the president of SAG had the opportunity to make such a claim, thus challenging the monopoly on profits hitherto enjoyed by the owners of the studios.

In announcing the strike in 2023, Drescher called attention to the large gap in compensation between the CEO’s of the studios and 99% of the members of the SAG union who were struggling financially. To be sure, the inclusion of “extras,” or background non-speaking roles that are on a per-project pay basis, means that the 99 percent were not depending on acting as a full-time job. Even so, the astounding pay of “A-list” movie actors may give people outside of the industry the misimpression that acting constitutes a wealthy profession.

The impression left by films grossing hundreds of millions of dollars that studios are wealthy is more accurate. The studios plead poverty, the SAG president exclaimed in astonishment, and yet somehow they have the money to pay tens of millions of dollars to their CEOs. In fiscal 2022, for example, the CEO of Disney made $24 million just before the company laid off 7,000 employees.[1] Drescher could have added that Netflix co-CEOs earned $43.2 million and $39.3 million in 2020—when the company raised the monthly price of its subscription.[2] Doubtless the management claimed that the company had no choice but charge customers more. It is interesting that managements can so easily put their companies in convenient straightjackets.

The union president must have sensed an opportunity to challenge the greed of American CEOs more generally as evinced in the increasing inequality between their compensation and the average of their respective workforces. “High seven figures, eight figures, this is crazy money that they make,” she said.[3] Implying that a basic shift in wealth distribution between upper managements and workers was justified, she stated, “What’s happening to us is happening across all fields of labor. . . . When employers make Wall Street and greed their priority, and they forget about the essential contributors that make the machine run, we have a problem.”[4] A basic problem in the American system of Capitalism.

The ratio of CEO compensation to that of the average worker in the U.S. in 2020 was 299.[5] Just one year later, the ratio was nearly 400, according to Statista. Even as the coronavirus shuttered or hampered many businesses, which meant mass layoffs, CEOs made out well nonetheless. Some CEOs made a thousand times that of the average worker. The annual ratios in the E.U. were much lower than in the U.S. That CEOs of American corporations had typically reached complete control of their respective boards of directors, which are technically to function in part as a check on their managements, presents not only accountability issues more generally, but also a situation in which the CEOs can set their own compensation and that of their managerial cadres. At one major corporation in 2023, the stockholders voted to deny the management’s proposed compensation package. Astonishingly, the resolution was nonbinding and the board approved the package anyway. This points to the existence of a major structural flaw in corporate governance in the U.S.

In pointing to the greed of CEOs of American companies in general, Drescher expanded her union’s agenda beyond the immediate financial interest of the members. She was making a societal contribution in claiming that the huge disparity of wealth between managements and workers was by then so large that an inflection point had been reached wherein SAG would try to set an example for other unions to follow in objecting to the arbitrary feature of American Capitalism wherein CEOs do not have to share the surplus of corporate wealth. She could have gone a step further by taking the opportunity to question the underlying assumption that stockholders should get the residual of profits that are not retained or invested. Even though the business model of studios had changed due to AI, the greed of American CEOs and their ability to set their own compensation packages had existed for some time and was finally too much for workers to take. That is to say, it was time for an enduring yet arbitrary (rather than necessary) aspect of American Capitalism to be changed. The system had been broken for some time, and the advent of AI meant that the harm would soon become even more unbearable.

---

[1] Samantha Bergeson, “Fran Drescher Blasts Bob Iger’s Strike Comments: ‘I Would Lock Him Behind Doors,’” IndyWire, July 14, 2023.
[2] Todd Spangler, “Netflix’s Ted Sarandos to Earn $40 Million in 2022, Read Hastings Pay to Top $34 Million,” Variety, December 31, 2021.
[3] Bergeson, “Fran Drescher Blasts Bob Iger’s Strike Comments: ‘I Would Lock Him Behind Doors.’”
[4] Ibid.
[5] Moira Ritter, “CEOs Made 299 Times More Than Their Average Workers Last Year,” CNN.com, July 15, 2021.

The Hebrew Bible on Business Ethics

The early Hebrews considered wealth to be an integral part of human perfection and, moreover, what ought to be.[1] The ideal man was wealthy and leisured, and yet occupied with honorable work.[2] In the Torah, as long as the Hebrews as a people obey God, including dutifully acting as stewards rather than as selfish exploiters of the land that God has provided, poverty should be nonexistent in Israel. “There need be no poor people among you, for in the land the Lord your God is giving you to possess as your inheritance, he will richly bless you, if only you fully obey the Lord your God.”[3] Blessed wealth is a reward for fidelity to Yahweh, whereas poverty here is indicative of, or even punishment for, disobedience, which will evidently always be the case in Israel, for, “There will always be poor people in the land.”[4] The conditionality leaps off the page, as does the notion of collective justice, and yet wealthy individuals, including business practitioners, are held to account. The ethic of work is upheld even though labor in Genesis is due to original sin. 

The full essay is at "Ancient Judaism on Wealth."

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[1]. Charles R. Smith, The Bible Doctrine of Wealth and Work (London: Epworth Press, 1924), 21.

[2]. Smith, The Bible Doctrine, 22, 33-34.

[3]. Deut. 15:4-5.

[4]. Deut. 15:11.