Seeing Red

by Martin Peretz | March 10, 2008

It was Matthew Arnold, I think, who exhorted 19th century England to "choose equality and flee greed."  It did nothing of the sort, of course.  And neither did Labour Britain in the 20th century, except smoothing out some of the sharp edges of penury and birth.  So England remains a class society, though one that, if you accumulate sufficient capital, opens at the top.

America is a less stratified society than Britain.  The poor of the U.S. are less permanently and structurally poor, although there does not exist in our country the ethic of reciprocal obligations across classes that binds people together in what we used to call a long time ago the "mother country."

 

Still, there was more than a thread of resentment towards the very rich in England which the quaint and patronizing ritual of Boxing Day (the day after Christmas in the U.K. and throughout the Commonwealth, including Canada) could not neutralize or efface.  Maybe it was the fact that, parallel to the reality of deep strains of social conservatism, there was also in England a bumptuous socialism, bolstered by social gospel Methodism and dry-as-dust Fabianism.  (Pat Moynihan blamed the miseries of post-independence Africa on the Fabian professoriat at the London School of Economics, with whom the continent's nationalist elite came to study.)

 

Aside from populism in the states of south and in the Great Plains, aside also from a Communist movement psychologically indentured to the Soviet Union, America has been spared the convulsions of class hatred.  But I believe that it may be coming because of the gross rewards accumulated by a corporate and banker class that has utterly failed in its own entrepreneurial and counting houses obligations.

 

Read in Saturday's Times an article by Jenny Anderson that is titled, "Chiefs' Pay Under Fire At Capitol." After leading Merrill Lynch into the deep muddy, E. Stanley O'Neal left the investment house with $161 million.  "Meanwhile," says the Times, the company "has announced write-offs totalling $10.3 billion."  With more to come. 

 

Angelo Mozilo took home more than $410 million in the eight years he has been CEO of Countrywide since he founded his company to specialize in risky lending.

 

And it's not only the banks, the investment concerns and the lenders who are rewarded for failure.  Companies fallen on hard times due to the sagacity of their leaders also pay up to those who have led them astray.

 

The fact is that at the top of the corporate class compensation is so lush that you can hardly tell that the executives have led their companies into deep red ink...and therefore fired more and more employees.  Sometimes it is the only real rationale for their extravagant "letting go" pay package.

 

It used to be that American capitalism rewarded those who brought prosperity to their companies, wealth to their shareholders, steady employment at decent wages to their employees and improvement in their customers' ways of living.  Not so anymore.  The social contract has been broken and traduced.  People will notice that the engineers of failure and decadence are still living the lush life.

 


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