The international effects have been even more devastating. The neo-liberal agenda and the Washington Consensus initiated deep deregulation of multi-national corporations, multiple ways to avoid paying taxes to the nations upon whose land the corporations did business, and private monopolization of public utilities.
The deregulation of multi-national corporations made it possible for them to exploit land and workers, catalyzing greater deforestation, which contributed to an accelerated rate of global warming and displaced indigenous peoples from tribal lands and resources.44
If neo-liberal free-market capitalism left a wide wake of devastation, it also left a yawning gap between its victims and its benefactors. Who actually benefitted from tax-cuts and offshore tax shelters, deregulation, and privatization? When Reagan took office, the marginal tax rate for top-tier earners was 70 percent. Today, the nation's top tax tier only contributes 35 percent of its income to the nation's common purse. To boot, the Washington Consensus expressly enabled corporations to utilize offshore tax shelters to maximize corporate profits. 45 Reagan pledged to kill unions and slash taxes for top tier earners upon entering office in 1981. In 1980, nearly 20 percent of private sector jobs in the U.S. were unionized. At that time the average CEO salary was approximately $1 million. By 2007, fewer than 7 percent of American workers were unionized and the average CEO salary had multiplied eleven times to nearly $11 million.46 In 1980 the ratio of CEO to worker wages was 42 to 1.47 By 2008, the ratio of S&P500 firm CEOs' pay to average U.S. workers' pay was 319 to 1. The ratio of CEO to minimum wage worker pay was 740 to 1 in the same year.48
CAN CAPITALISM BE REDEEMED?
Recently, I sat at a conference table with 10 students at Waynesburg University, a Christian college located in the heart of southwest Pennsylvania's coal country, south of Pittsburgh. I had spoken on the concept of shalom (biblical peace) in the morning chapel service, so one student wanted to know what I thought of capitalism in light of God's goal to reconcile all relationships declared very good in Genesis 1, which includes the relationship between humanity and the systems that govern us. Kyle, a sharp senior, asked: "Can capitalism be redeemed?"
I replied, "I'd rather not talk about capitalism generally. I'd rather talk about our actual economic system. So, if you ask can neo-liberal, free-market capitalism be redeemed, the answer is, "I don't think so." The premises upon which it stands are inherently in direct opposition to the purposes of God. I shared a quote from Jerome Guillet, an investment banker in the energy sector in France. He was interviewed in the documentary "The End of Poverty?" Guillet said flatly: "Famines are effective market solutions. They reduce demand. If we leave it to the markets, that's what we have. If there's not enough food, then some people will die and that reduces demand and the market is balanced. It's an effective market solution."49 In that system, the market takes the place of God. The market rules and, as an accepted consequence, millions of images of God are crushed. Now, if you ask me, do you think neo-liberal, free-market capitalism can be dismantled and replaced with a more just system? The answer is, "Absolutely. We chose free-market capitalism. We can un-choose it. Human actors constructed our economic system; human actors can deconstruct it."
Aneel Karnani, an associate professor of strategy at the University of Michigan's Stephen M. Ross School of Business, warns in a Wall Street Journal (WSJ) article:50 "The fact is that while companies sometimes can do well by doing good, more often they can't. Because in most cases, doing what's best for society means sacrificing profits." He explains further, "Executives are hired to maximize profits; that is their responsibility to their company's shareholders. Even if executives wanted to forgo some profit to benefit society, they could expect to lose their jobs if they tried—and be replaced by managers who would restore profit as the top priority."
THE REGULATION OF GOVERNMENT
"The ultimate solution," Karnani says, "is government regulation. Its greatest appeal is that it is binding. Government has the power to enforce regulation. No need to rely on anyone's best intentions." In a WSJ podcast interview Karnani uses the problem of pollution as an example:51
Karnani: When companies manufacture certain products, they pollute the environment. The only way to produce less pollution is for the company to make less profit. We cannot expect companies to do this voluntarily out of some sense of corporate responsibility motive. So, now we need society to set pollution standards. That is the role of government. That is the role of the political mechanisms we have set up in society to determine the appropriate pollution levels that we are willing to tolerate.
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