Notes

Chapter 1

1. This recognition was not, in fact, discussed, debated, or even decided by the Court so much as assumed. In fact, the passage in question, inserted in the ruling as a headnote, was written by a court reporter, himself the president of a private railroad. Such headnotes were later agreed to have no legal force, but by then the precedent had been established. Nace’s book, Gangs of America: The Rise of Corporate Power and the Disabling of Democracy (2003), probes into this and related issues, concluding, “In general, Supreme Court decisions have granted new corporate rights with virtually no supporting argument, or alternatively have used a strange medley of rationales.” The result has been “a full-fledged legal super-person” (pp. 241, 246).

2. Alfred Nobel was long dead when the Bank of Sweden created “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.” Even if it did not mean it to be confused with the real Nobel Prizes, a sloppy press, hardly discouraged by otherwise proper economists, has done it for them. The homepage of www.Nobelprize.org until recently listed the five “Nobel Prizes,” followed by “Prize in Economic Sciences.” (It would be interesting to know why this was changed.) Would psychologists have gotten away with this had they created such a prize for themselves?

3. These words have been attributed to the Scotsman Alexander Fraser Tytler (circa 1810). The original source has not been found, although the wording would seem to be his (see Collins 2009). The American Library of Congress cites “Tytler, unverified.” But the dispute over the words’ origin hardly diminishes the significance of the words themselves.

4. David Brooks, a moderately conservative columnist for the New York Times, wrote in 2010, “[T]he American story is not just the story of limited governments; it is the story of limited but energetic governments that used aggressive federal power to promote growth and social mobility.” He referred to efforts that regard “every new bit of government action as a step on the road to serfdom” as potentially amounting to “a political tragedy.”

5. “The Americans … are fond of explaining almost all the actions of their lives by the principle of self-interest rightly understood; they show with complacency how an enlightened regard for themselves constantly prompts them to assist one another and inclines them willingly to sacrifice a portion of their time and property to the welfare of the state” or, later, to “save the rest” (1840/2003: 222, 223). On the next page, however, de Tocqueville added, “[B]ut it remains to be seen how each man will understand his personal interest” (p. 224).

6. In 2009, the great governments of the world got together in Copenhagen. Their accomplishment, according to the British minister for climate and energy (note his title), was to “put numbers on the table” (Kanter 2009). In Durban two years later, the two hundred assembled countries “agreed to begin a long-term process of negotiating a new treaty” (Austen 2011). Then in 2012, Rio +20 was claimed to have produced “an historic agreement, because it is the start of discussion on sustainable development” (CBC, June 22). Later in that year, lest anyone was left who did not get the point, a UN Climate Summit was held in Qatar, the country with the worst environmental footprint on Earth (The Economist, 2013).

7. Concerning laissez-faire and the market economy, Karl Polanyi has written, “However natural it may appear to us to make [the assumption of the market economy], it is unjustified: market economy is an institutional structure which, as we all too easily forget, has been present at no time except our own, and even then it was only partially present…. [F]ree markets could never have come into being merely by allowing things to take their course. Just as cotton manufacturers—the leading free trade industry—were created by the help of protective tariffs, export bounties, and indirect wage subsidies, laissez-faire itself was enforced by the state…. Even free trade and competition required intervention to be workable” (1944: 37, 139, 150).

8. A New York Times article (Hakim 2013) revealed that European officials had been “consulting with business leaders on both sides of the Atlantic on how to structure a free-trade pact” before the talks had even begun. “Internal documents obtained by The New York Times offer a window into the extent that European trade negotiators allow big business lobby groups to set the agenda. Among other things, the business community was seeking an active role in writing new regulations.”

Chapter 2

9. In a 1991 paper, James G. March contrasted “the exploration of new possibilities” with “the exploitation of old certainties,” concluding that the latter may be “effective in the short run but self-destructive in the long run” (p. 7).

10. “[I]ndividualism, at first, only saps the virtues of public life: but in the long run it attacks and destroys all others and is at length absorbed in downright selfishness” (de Tocqueville 1840/2003: 98).

Chapter 3

11. “The neoliberal reforms … are not designed to shrink the state … but to strengthen state institutions to serve even more than before the needs of the substantial people” (Chomsky 2006: 218, citing Ocampo).

12. In the United States, “We still have one party that talks the language of government and one that talks the language of the market. We have no party that is comfortable with civil society, no party that understands the ways government and the market can both crush and nurture community, no party with new ideas about how these things might blend together” (Brooks 2013a).

13. Some years ago, an article in Vanity Fair (Hitchens 1998) quoted a right-wing activist who had been a vociferous opponent of Hillary Clinton’s public sector initiative in health care: “I was the pit bull for the attack out here…. But I never imagined that the government would implode and leave the field to the insurance industry and the corporations that got in on the first floor.” The author added, “[N]obody voted for [this market-medicine HMO system]; nobody was consulted about it; nobody elected it. Yet it … is accountable only to itself and to unforeseeable fluctuations in the stock market.” No mention was made of the plural sector.

14. See Swift (1999) on the ups and downs of “civil society.” Another, related problem is the lack of any widely recognized author and book associated with this sector. The private sector has Adam Smith and his Wealth of Nations—or at least that one paragraph mentioned earlier—reinforced by the writings of Hayek and Friedman. And the public sector, at its extreme, has had Karl Marx and his Das Kapital. My nomination for the plural sector is Karl Polanyi and his book The Great Transformation (1944), although sections of de Tocqueville’s Democracy in America (1840/2003) could well take their place alongside the works of Smith and Marx.

15. “[T]he landscape of the third sector is untidy but wonderfully exuberant” (de Oliveira and Tandon, quoted in Edwards 2004: 32). “It promotes pluralism by enabling multiple interests to be represented, different functions to be performed, and a range of capacities to be developed” (p. 32).

16. We could also call this the “social sector,” but only if we also called the other sectors political and economic.

17. “[S]tockholders gain omnipotent powers: they can take massive corporations, break them apart, load them with debt, sell them, shut them down, and drive out human beings—while employees and communities remain powerless to stop them. Power of this sort … comes down to us from that time when the landed class was the privileged class, by virtue of its wealth in property. To own land, was to be master … [the] lords could own serfs, like so much livestock” (Kelly 2001: 41).

18. “Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent [of wealth] in America when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office” (Stiglitz 2011). Could all this be why so many of them vigorously oppose tax increases for wealthy Americans?

19. Maybe not. But one company has managed to patent a couple of our human genes, with the consequence that it has been able to charge more than $3,000 for a breast cancer test (Pollack 2011).

20. Biologist Garritt Hardin published an article in 1968 entitled “The Tragedy of the Commons” that became a kind of tragedy in its own right when economists embraced it to dismiss the viability of common property. However, “eventually Hardin himself had to modify his stance. He acknowledged that the problem is not common ownership per se but rather open access—that is, commons in which there are no social structures or formal rules to govern access and use” (Rowe 2008: 142). Of course, the real tragedies were the exploitative seizures of common property: “Enclosures have appropriately been called a revolution of the rich against the poor. The lords and nobles were upsetting the social order, breaking down ancient law and custom, sometimes by means of violence, often by pressure and intimidation. They were literally robbing the poor of their share in the common” (Polanyi 1944: 35).

21. In Governing the Commons, Ostrom (1990) observed that “neither the state nor the market is uniformly successful in enabling individuals to sustain long-term, productive use of natural resource systems…. Both centralization advocates and privatization advocates accept as a central tenet that institutional change must come from outside and be imposed on the individuals affected…. Both frequently advocate oversimplified idealized institutions” (pp. 1, 14, 22). Ostrom specified in considerable detail the conditions under which common and other forms of property work most effectively. She also noted that “a competitive market—the epitome of private institutions—is itself a public good” (p. 15).

22. “U.S. Civil Society has moved from ‘membership to management’ over the last forty years…. This is partly because the liberal establishment tends to be divorced from grass roots activism…. There has been a worldwide professionalization of the non-profit sector and a gradual distancing of associations from their social base” (Edwards 2004: 35).

23. Now some of the big financial institutions are jumping on the bandwagon of providing stocks and bonds for nonprofits. Goldman Sachs, for example, has a social impact fund, designed to “make the nonprofit world more efficient at fundraising…. [If] donors thought about their charity as an investment, literally, it would transform the nonprofit sector” (Sorkin 2013). No doubt!

24. Particularly destructive has been the distinction between leadership and management, with the latter seen as more grand: “doing the right things” instead of “doing things right” (Bennis 1989; see also Zaleznik 1977). Try doing the right things without doing them right. Indeed, try leading without managing: you won’t know what’s going on. (See my book Simply Managing, 2013.)

25. “The political associations that exist in the United States are only a single feature in the midst of the immense assemblage of associations in that country. Americans of all ages, all conditions, and all dispositions constantly form associations…. Whenever at the head of some undertaking you see the government in France, or a man of rank in England, in the United States you will be sure to find an association” (de Tocqueville 1840/2003: 106).

26. The first real crack in Soviet communism arguably came because of two such associations in Poland: the Solidarity Union, which found its opening thanks to the survival in that country of the other association—the Catholic Church.

27. “Western development enterprise has been about separating people from their traditional means of livelihood and breaking down the bonds of security provided by family and community to create dependence on the jobs and products that modern corporations produce” (Korten 1995: 251).

28. In fact, the word community has become fashionable to describe what are really networks, as in the “business community” or the “medical community”—“people with common interests [but] not common values, history, or memory.” A century or two earlier, the word “seemed to connote a specific group of people, from a particular patch of earth, who knew and judged and kept an eye on one another, who shared habits and history and memories, and could at times be persuaded to act as a whole on behalf of a part” (Giridharadas 2013).

29. See Marche’s (2012) article “Is Facebook Making Us Lonely?” March claimed that, thanks largely to ourselves, “we suffer from unprecedented alienation…. In a world consumed by ever more novel modes of socializing, we have less and less actual society.”

Chapter 4

30. “[G]overnment agencies are geared for stability, not change. Their processes are designed to ensure thoroughness, fairness, and certainty. Something as simple as adding bike lanes in a neighborhood can go through over 40 reviews and committees before the first stripe is painted” (Vossoughi 2011).

31. An interesting article (Higgins 2012) appeared after the 2012 disastrous flooding in New York and New Jersey. It compared the Dutch emphasis on “disaster avoidance” with the American inclination to do “disaster relief.” A Dutch authority referred to American attitudes that “make it difficult to mobilize public attention and money to prevent disasters ahead of time.”

32. In 1968, the Harvard Business Review published an article pointing out that American business fought every single piece of social legislation proposed during the twentieth century, from the child labor laws of the early 1900s on up (Levitt 1968). Has that changed?

33. This point has been promoted from the left as well as the right. On the left: who are they to influence social issues? On the right: who are they to so spend shareholders’ money? A counterargument is that doing so will make more money for the shareholders. But does it really pay to be good? (See Mintzberg 1983: Chapters 30 and 31.)

34. At the 2013 UN conference on climate change, held in Poland (which has six of the ten European cities with the highest concentration of particle matter, thanks largely to the burning of coal, and a government that “has been increasingly active in trying to block more aggressive regulations to curb climate change”), we had the pitiful sight of the representative from the Philippines, just after its terrible storm, begging for action. “As if to prove a point, the coal industry … scheduled its own climate summit meeting in Warsaw [to run] concurrently with the United Nations conference” (Hakim and Zurawik 2013). The International Energy Agency reported in late 2013 that the global consumption of coal, already a major contributor to global warming, was likely to continue growing at a “relentless pace” through 2018. It has accounted for more than 60 percent of the rise in carbon dioxide emissions since 2000 (Reed 2013).

35. At a party I attended in Virginia a few years ago, I listened to a group of retired military people rail on about how awful government is and how dreadful its taxation, without ever recognizing that, as government employees, they had been entirely dependent on that taxation for their own incomes.

36. See Robinson (2011) for an interesting view on this point. “The budgetary and fiscal crises that supposedly justify spending cuts and austerity are contrived,” made possible by deregulation of the financial industry that encouraged speculation, with the resulting “transfer [of] the burden of the crisis to working and popular classes.” The “new speculation frenzy by financial capitalists is now being presented as working people living beyond their means, a convenient smokescreen.” Robinson described “the austerity sweeping across Europe” as the “Third-Worldization of the ‘First World.’”

37. This could start with some pharmaceutical research. The advances are welcome, but do we need the large, publicly traded companies to get them, and at those prices? Thanks to government-granted but underregulated monopolies, called patents, many pharmaceutical companies have maneuvered themselves into being able to charge “what the market will bear” (Businessweek’s use of the term [Carey and Barrett 2001]). What the market will bear, many sick people cannot. The companies claim that they need their profits to support their research. How much? Indeed, if you believe that we need to be beholden to these companies for such research, consider this: three of the greatest pharmaceutical discoveries of all time—penicillin, which led to antibiotics, insulin, and Salk’s polio vaccine—all came out of not-for-profit laboratories. Moreover, research in a number of the biggest pharmaceutical companies has been languishing for some years. They have been buying many of their new product ideas from smaller, more vibrant firms, while spending huge amounts on the promotion of them. Development of these ideas—testing them to ensure their safety and effectiveness—may require large scale, but that does not justify the economic rents that these companies have been getting. (See my 2006 article “Patent Nonsense.”)

38. This point applies to overall economic development, and to development of people, too. In an article entitled “Developing Leaders? Developing Countries?” (2006), I contrasted three models of economic development: outside in, or globalization; top down, or state intervention; and inside up, or indigenous enterprise. No major economy ever developed through the first model (Chang 2002). The evidence is strong that the indigenous model is key to development, especially for a nation’s start-up.

39. While the governments of the world were putting those “numbers on the table” at their 2009 global warming conference in Copenhagen, resourceful Danes around the country—in citizen groups, businesses, and government—were engaged in perhaps the world’s most ambitious program for developing clean, sustainable energy.

40. This is not to say that there is no blurring on the edges where the sectors meet. Organizations can be plotted all around the circle of our theme diagram—for example, state-owned enterprises in the public sector but on the side of the private one and companies with significant shareholding by employees close to the co-operatives of the plural sector.

41. Colleagues and I are preparing for September 2015 a GROOC—a MOOC (massive open online course) for groups—called “Social Learning for Social Impact” (see https://www.mcgill.ca/desautels/programs/grooc).

42. “There are many critics who will say, ‘You can’t incarcerate a corporation’” (Stewart 2013). Not true. There is a recent precedent for this, at least concerning part of a corporation: SAC Capital agreed to “plead guilty to all five counts of insider trading violations and pay a record $1.2 billion penalty, becoming the first large Wall Street firm in a generation to confess to criminal conduct…. The guilty plea and fine paid by SAC are part of a broader plea deal that will impose a five-year probation on the fund. SAC must also terminate its business of managing money for outside investors” (Protess and Lattman 2013; see also Lattman and Protess 2013). Critics have pointed to another aspect of “too big to jail”: that innocent employees have to suffer for the errors of the executives. But many people elsewhere now suffer for those errors. Anything that can reduce this criminality benefits employees, customers, and society alike. Rights also exceed responsibilities, with employees as well as suppliers and society suffering the consequences, when a parent company can walk away from a bankrupt subsidiary after years of drawing profits out of it.

43. David Brooks (2011f) commented that “President Obama has certainly not shut corporate-types out of the regulatory process. According to data collected by the Center for Progressive Reforms, 62 percent of the people who met with the White House office in charge of reviewing regulations were representatives of industry, while only 16 percent represented activist groups. At these meetings, business representatives outnumbered activists by more than 4 to 1.” Brooks, a normally sensible columnist, looked favorably on such business as usual.

44. For example, companies such as Novo Nordisk in Denmark and Tata in India have concentrated their voting shares in family trusts. And Germany, which legislated significant worker representation on the boards of its corporations in 1976, has remained one of the world’s great economic success stories.

45. The tiny country of Bhutan has become famous for adopting Gross National Happiness in place of Gross National Product. I visited Bhutan a few years ago and, in discussing this with some of its knowledgeable people, was struck by two things. First, the Bhutanese had no idea how to measure most of this GNH. Second, this inability did not matter because they were behaving true to its precepts. (In the words of a BBC reporter, this had become “a way of life.”) Then the international experts descended on Bhutan, to help them measure it. Soon each of the nine dimensions had “its own weighted and un-weighted GNH index … analyzed using … 72 indicators…. Mathematical formulas have even been developed to reduce happiness to its tiniest component parts” (Mydans 2009). Gross, for sure, but happiness? The problem with techniques such as the “balanced scorecard” (Kaplan and Norton 1992) is that it cannot be balanced because measurement favors economic factors over social ones (see Mintzberg 1982).

46. The danger of doing this earlier—for example, in the provision of seed money for start-up, as foundations sometimes do—is that people in offices who believe they know better—with their measuring and evaluating—can get in the way of people on the ground who have to learn better. But once that learning is more or less completed, people who do know better, about institutionalizing formally what has been arrived at informally, can be key to the widespread diffusion of useful social innovations.

47. Similar strengths in all three sectors, including strong cooperative movements, can be found in a number of smaller countries, such as Costa Rica (Garrigues 2009). As for some larger countries, France has had proactive (“dirigiste”) governments and an established private sector—with the two sometimes overly inclined to cooperate with each other. This last point is true of China, too, which is otherwise quite different. In a commentary in the New York Times, Charles Kupchan (2012) contrasted “democratic capitalism,” led by the United States, with “state capitalism,” led by China. The former, in our terms, attempts to balance itself on one leg (note that democracy is the adjective, capitalism is the noun), while the latter tries to do so on two legs: a powerful state reinforced by strong enterprises that know their place, with little room for the plural sector. Economically, such state capitalism seems to be doing well right now, perhaps because it constrains individual liberties. (Autocracy has its advantages.) But will it continue to hold the forces of pluralism in check, which it has sometimes done so crudely? Kupchan suggested that state capitalism will change globalization as we know it, as will another approach that he identified with India and Brazil: “stable, secular democracies that appear to be hewing closely to the Western model.” Not quite. Their public sectors are stronger (he did note that “both nations have embraced a left-wing populism”), while the plural sectors of both seem to be especially vibrant.

48. The protests concerning the high costs of the recent FIFA World Cup event in Brazil may have looked like disorder to many people. But in which other country that has blown so much public money on such an event have the people had the courage to confront these excesses while the event was happening, instead of complaining about it afterward?

49. Yet a number of the analysts of New York and London have been bullying the country, as if to punish its people for electing left-wing governments from 2003. One report cited figures (from Sharma 2012) about Brazil’s economic growth from 1980 to 2000 not having been productivity based, while criticizing the Brazilian government for expanding what this analyst saw as an overly generous welfare program. The claim was that while this may have reduced the country’s inequality, it came at the expense of economic growth. In fact, the Brazilian economy grew at an average rate of 4.6 percent during Lula’s years in office (2003 to 2011), just before this analyst wrote the report. As for productivity, there are two kinds: one that really does do things better, the other that is built on the backs of employees—for example, by engaging in mass firings. (For this unproductive side of productivity, see www.Mintzberg.org/enterprise.) A Reuters report (Parra-Bernal 2012) referred to the country’s “heavy-handed economic politics” and mentioned a World Bank “Doing Business” survey that ranked Brazil 126 out of 183. (How about a “Living Life” survey?) We can see this bullying elsewhere, too. In 2013, Standard & Poor’s cut France’s credit rating, perhaps in response to it having elected a socialist government the year before. As Paul Krugman (2013) put it in one of his columns, France was being punished because it “committed the unforgiveable sin of being fiscally responsible [for example, raising taxes on the wealthy] without inflicting pain on the poor and the unlucky.”

50. In a column in the New York Times, Anand Giridharadas (2011) mused about whether Sarah Palin’s detractors would notice if she said “something intelligent and wise and fresh about the American condition.” In a talk, she made “three interlacing points”:

(1) that the United States is now governed by a “permanent political class” drawn from both parties, which is increasingly cut off from the concerns of regular people; (2) that these Republicans and Democrats have allied with big business to mutual advantage to create what she called “corporate crony capitalism”; (3) that the real political divide in the United States may no longer be between friends and foes of big government, but between friends and foes of vast, remote, unaccountable institutions (both public and private). Palin went on to condemn corporate lobbyists, special interests, and “the collusion of big government and big business and big finance to the detriment of all the rest,” and to distinguish good from bad capitalists, meaning small ones that take risks from big ones that live off bailouts and dodge taxes, while not creating jobs.

Was Palin on the left or the right in making these comments, so similar to ones being made here? (See also Freeland 2013a, 2013b.)

51. The country remains unable to rid itself of an anachronistic electoral college or adopt a system of measurement used most everywhere else, let alone stop being bamboozled by its gun lobby. (Do the people of America have the right to bear nuclear arms?) The country has declared wars on poverty, drugs, and more, to no avail.

Chapter 5

52. On the HBR Blog Network, Branko Milanovic, the lead economist of the World Bank research group, wrote in the summer of 2011, “The reason [behind the riots in London] lies in inequality of incomes and wealth that the neo-liberal reforms have produced, combined with an incessant ideological emphasis on material success and consumption as key desirable features of life.” He described this as “ideological bludgeoning…. [T]he young … ‘bought’ the ideology that wealth equals ethical superiority but found themselves on the wrong side of the equation. The venues that could have led them to wealth were closed—by rising unemployment, cuts in social services, higher costs of education, higher rents, and not least almost open corruption and immorality of the elites…. They see the old welfare economies disappearing, while politicians, businessmen, and music stars cynically seize society’s riches [and] they don’t have an alternative social blueprint. If they truly believed that a different world is possible, they would have organized into political groups, not mobs.” Milanovic concluded with the following: “The challenge, should we choose to accept it, is to figure out a way of engaging a generation that doesn’t seem to want to be engaged. Ideas welcome.”

Appendix

53. As I wrote this section initially, Facebook’s entry to the stock market was getting great attention. The question was, How would it use advertising to exploit its enormous database? More important questions could have been, Where would the line be drawn between profit and privacy, and by whom? What we do know is that companies now initially draw those lines in their own interests—the default position seems to be to do what you can until you get caught or stopped. Will the regulators or the courts ever catch up? “In Washington, lobbyists from technology, marketing, and related industries, have effectively put the brakes on privacy legislation” (New York Times editorial, November 5, 2013).

54. If my use of the word prostitution seems excessive, consider this passage from an article by the Harvard Business School professor who for many years taught its most popular elective course: “George Bernard Shaw, the famous playwright and social thinker, reportedly once claimed that while on an ocean voyage he met a celebrated actress on deck and asked her whether she would be willing to sleep with him for a million dollars. She was agreeable. He followed with a counterproposal: ‘What about ten dollars?’ ‘What do you think I am?’ she responded indignantly. He replied, ‘We’ve already established that—now we’re just haggling over price’” (Jensen and Meckling 1994). Instead of qualifying this in any way, Jensen and his colleague followed the story with this statement: “Like it or not, individuals are willing to sacrifice a little of almost anything we care to name, even reputation or morality, for a sufficiently large quantity of other desired things.” In other words, a generation of students from the school that has had the greatest influence on corporate behavior was taught that, pushed to the limit, we are all prostitutes.

55. After the CBC dropped radio advertising in 1975, “the result was … an explosion of creative excellence that earned to the network a large and fanatically loyal audience” (Rowland 2013).

56. To this list might be added some other international institutions, including the Organisation for Economic Co-operation and Development and the World Economic Forum, whose 2006 conference in Davos included a session entitled “Global Business: Savior or Scapegoat.” Some choice! In that session, one panel member, the chairman of JPMorgan Chase, went on about the few bad apples who were damaging the reputation of big business. On September 1, 2013, after a string of scandals concerning the alleged manipulation of energy markets, criminal investigations of mortgage securities, and the hiring of the children of Chinese political leaders, the New York Times published an editorial entitled “Chasing JPMorgan Chase” about its “sheer size, and scope and complexity … encourag[ing] speculative and bad behavior.” Subsequently, the company agreed to a $13 billion settlement on its mortgage activities (Protess and Silver-Greenberg 2013) and was being sued in connection with the Goldman Sachs aluminum scandal (Harris 2013).

57. An earlier head of WTO was quoted as describing environment-based regulations and standards as “doomed to fail and could only damage the global trading system” (Wallach and Sforza 1999: 28; see also Korten 1995: Chapter 13 on the WTO).

58. The United States has three regimes for income taxes, which may illustrate the imbalance in its society better than anything else. (1) Full taxation for regular Americans and anyone living elsewhere deemed by the U.S. government to be an American citizen. The latter are required to file tax returns in the United States, no matter where they live—even if they were registered as citizens by their parents and have never spent a day in the country—and to pay whatever exceeds the taxes they have paid where they do live. (2) Low taxation for American corporations pretending to live abroad. The U.S. government is prepared to track down its citizens, but not its corporations. Many have been able to maneuver the presence of their headquarters in countries with low tax rates (Bowley 2013). One study by the Congressional Research Service found that in 2008, subsidiaries of American corporations generated 43 percent of their profits in five prominent tax havens where they had 4 percent of their foreign employment and 7 percent of their foreign investment (Rattner 2013). There can be no more quintessentially American company than General Electric. Almost half of its employees work in the United States, where almost half its revenues are generated. In 2010, GE reported worldwide profits of $14.2 billion, only $5.1 billion of it claimed to have come from operations in the United States. The company paid no U.S. taxes at all that year; in fact, it claimed a tax benefit of $3.2 billion. From 2005 to 2010, the company declared $26 billion in American profits while receiving a net tax benefit of $4.1 billion. “In 2010, 25 of the 100 largest U.S. companies paid their CEOs more than they paid in U.S. taxes…. Twenty spent more on lobbying and eighteen gave more … in bundled contributions to political candidates” (Collins 2012: 3, 53). This activity did, however, create employment: GE’s tax department has been estimated to employ 975 people, not to mention its lobbyists (Kocieniewski 2011a). (3) Low taxation for wealthy Americans. Many of the richest Americans have been able to maneuver their annual earnings into lower-taxed capital gains. During the 2012 presidential campaign, Mitt Romney was forced to admit that he paid 13.9 percent on his $21.7 million gross income for 2010. The federal tax rate for the four hundred Americans with the highest incomes fell from 30 percent to 17 percent between 1995 and 2007, to the point where Warren Buffet, one of the richest people in America, published a New York Times commentary (August 19, 2011) asking the government to raise taxes on the rich. He claimed to pay only 17.4 percent of his taxable income to the federal government in 2010, less than all the other people in his office, who averaged 36 percent. “My [billionaire] friends and I have been coddled long enough.” Most of those friends, however, remained silent. Collins (2012) has referred to this kind of thing as “a triumph of capital and a betrayal of work” (p. 8).

59. Back then, de Tocqueville wrote, “Democracy has … been abandoned to its wild interests, and it has grown up like those children who have no parental guidance” (1840/2003: 7). He was talking about France, not America. About America, he wrote, “[D]uring my stay in the United States, nothing struck me more forcefully than the general equality of condition among the people” (p. 3).

60. One study of health care in the most developed Western countries (Davis, Schoen, and Stremikis 2010) found that the United States ranked last on the dimensions of access, patient safety, coordination, efficiency, and equality. Infant mortality and mortality amenable to health care were the highest among the developed nations. A 2006 study found the rates of diabetes and heart disease among the wealthiest and best-educated Americans to be comparable with those of the poorest and least-educated English. Yet the most popular prescription for fixing American health care continues to be treating it more as a business and increasing its level of competition (see, for example, Porter and Teisberg 2004, 2006; also Herzlinger 2006, 2007), even though American health care is already highly competitive and business-like. (This topic is discussed at length in a book I am completing entitled Managing the Myths of Health Care.)

61. For more on “America’s Great Regression” (in relation to the discussion of income disparities that follows), see Reich (2011).

62. For the human side of these numbers, see Putnam’s (2013) description of the lives of haves and have-nots in the Ohio town of his youth, compared with those living in that town today.

63. For a list of overt U.S. military and covert CIA interventions, see “From Wounded Knee to Libya: A Century of U.S. Military Interventions” (Grossman 2012). The Monroe Doctrine, issued in 1823 to stop European interference in the newly liberated countries of Latin America, eventually metamorphosed into an America declaration of dependence: the country’s self-appointed right to intervene unilaterally in any country of the Western Hemisphere, and later the world, that acted contrary to its own interests.

64. “Somewhere in the back of their minds, a lot of people seem to be realizing that the alternative to a United States–dominated world … is a leaderless world” (Friedman 2009). “To regain the identity it enjoyed during the Cold War, the United States ought to become the leader of a community of democracies…. [It] would still need to retain its military might, but this strength would serve to protect a just world order” (Soros 2004: 167–168).

65. Here, too, denial is the order of the day. In one of his recent columns, entitled “Saving the System,” David Brooks (2014b) wrote, “Powerful people have generally tried to impose their version of the Truth on less powerful people.” He was referring to other powerful people, without recognizing (in this column, at least) that what he called “liberal pluralism” is his and America’s version of the Truth. Five weeks later (2014a), Brooks quoted Micklethwait and Wooldridge (2014) that “so far, the 21st Century has been a rotten one for the Western model,” while in an earlier column (2011c), he wrote about the “vertiginous tangle” of interests overwhelming the U.S. government.” Brooks seems to be of two minds: recognizing what is going on locally yet blind to some of its consequences globally.

66. As this book was being finalized for publication, new threats were appearing: Russia was back to cold war habits in Ukraine, and ISIS was carrying extremism to new levels of barbarism in the Middle East. Do we need to rely on “liberal democracy,” led by America, after all? In a New York Times “Letter from America,” Anand Giridharadas (2014) came to another conclusion, consistent with the arguments of this book:

Behind the chaos is a void of influence right now—a void in which countries are unable to prevent other countries or ragamuffin groups from doing bad things. And behind the void of influence is a void of example…. By failing to embody so many of its own ideals nowadays, the United States (like other liberal democracies) deprives the world of a compelling counterweight to the ideas (such as they are) of so-called Putinism, ISISism, Islamism, Chinese authoritarianism and other -isms on the march. In this liquid, interdependent age, many people around the world wonder what to believe in.